· the new kirloskar brothers corporate office has been designed to reflect the four principal...
Post on 25-May-2020
3 Views
Preview:
TRANSCRIPT
Board of DirectorsSanjay Kirloskar Chairman & Managing DirectorGautam Kulkarni Vice ChairmanVikram Kirloskar Executive Director upto 20.01.2010M. S. KirloskarS. N. InamdarRahul KirloskarU. V. RaoR. K. Srivastava Whole Time DirectorP. S. JawadekarJ. R. Sapre Whole Time DirectorA. N. Alawani Lalita D. Gupte Pratap B. Shirke
Company SecretaryG. P. Kulkarni
AuditorsM/s. P. G. Bhagwat, Chartered Accountants
BankersBank of IndiaCanara BankHDFC Bank LimitedICICI Bank LimitedCitiBank N.A.
Registered Office Udyog Bhavan, Tilak Road,Pune – 411 002, Maharashtra State (India)Phone : (020) 24440770 Fax : (020) 24402083E.mail : kblin@kbl.co.in Website : www.kbl.co.in Group Website : www.kirloskar.com
Corporate Office “YAMUNA”, Survey No. 98 (3-7), Baner,Pune – 411 045, Maharashtra (India)Phone : (020) 27214444 Fax : (020) 27211136 E.mail : kblin@kbl.co.in Website : www.kbl.co.in Group Website : www.kirloskar.com
Works Kirloskarvadi, Dewas, Shirwal, Kondhapuri
Information for Shareholders
Annual General Meeting
Day & Date : Tuesday, July 27, 2010
Time : 11.00 a.m.
Venue : “YAMUNA”, Survey No.98 (3-7)
Baner, Pune – 411 045
Dates of Book
Closure : July 17, 2010 to July 27, 2010 (both days inclusive)
Contents Page No.
Decade at a Glance 2Directors' Report 3Management Discussion & Analysis 12Report on Corporate Governance 29Auditors' Report 42Balance Sheet 46Profit & Loss Account 47Cash Flow Statement 48Schedules to the Accounts 49Statement relating to Subsidiary Companies 88Consolidated Financial Statements 95
1
DECADE AT A GLANCE
(Rupees in Millions)
Notes :
Previous years' figures have been regrouped to make them comparable.
* Includes Dividend Recommended 175% and special dividend of 100% recommend on the occasion of centenary celebrations of
Kirloskarvadi factory.
** After Issue of Bonus Shares in the ratio of 2 : 1
# Figures are calculated after giving effect to the Scheme of Arrangement. (Refer note B-31)
Figures of Earning per Share and Book Value per Share are calculated for all the reported periods above after considering the
subdivision of equity share of Rs. 10/- each to share of Rs. 2/- each.
Particulars 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Sales 4162 3746 4757 5078 7309 9246 13400 15251 18309 20178
Other Income 295 82 72 225 132 750 2408 430 359 480
Material Cost 2557 2279 3126 3393 4859 6093 9290 11126 14000 14987
Other Expenses 1493 1209 1371 1405 1896 1965 2563 2704 3176 3341
Interest 141 106 75 65 48 55 84 169 303 335
Depreciation 78 83 85 107 100 97 121 182 207 265
Profit before tax 188 151 172 333 538 1786 3750 1500 982 1730
Income tax provision 48 28 52 68 31 63 385 399 312 555
Net Profit after tax 140 123 120 265 507 1723 3365 1101 670 1175
Share Capital 71 71 71 71 71 212 212 212 212 # 159
Reserves 1321 1352 1459 1565 1832 2932 5808 6409 6879 # 6975
Net Worth 1392 1423 1530 1636 1903 3144 6020 6621 7091 # 7134
Imports 54 49 119 144 261 606 987 1152 2084 5073
Exports 586 585 585 572 1005 685 2266 1483 2240 1694
Basic Earnings per Share (Rs.) (Face Value of Rs. 2/-) 3.98 3.48 3.41 7.51 14.17 15.42 31.82 10.41 6.34 # 14.81
Basic Earnings per Share (Rs.) (Face Value of Rs. 2/-) (Excluding Extraordinary Income / Expense) 3.15 3.48 3.41 7.51 14.17 10.70 14.76 10.41 6.34 # 14.81
Dividend % 45.00 45.00 45.00 200.00 300.00 200.00 200.00 200.00 100.00 * 275.00
Book Value per Share (Rs.) 39.47 40.37 43.40 46.40 53.97 ** 29.69 ** 56.92 ** 62.60 ** 67.05 **#89.92
Debt Equity Ratio 0.53 0.41 0.24 0.29 0.18 0.06 0.08 0.09 0.03 0.07
2
DIRECTORS' REPORT TO THE MEMBERS
Current PreviousYear ended Year endedMarch 31, March 31,
2010 2009(Rs.) (Rs.)
thYour Directors present the 90 Annual Report and the Audited Annual Accounts of the Company for the year ended March 31, 2010.
FINANCIAL RESULTS
The financial results of the Company for the year 2009-10 as compared with the previous year are as under: -
Sales 20,178,370,074 18,309,447,980
Other income 479,471,733 359,135,347
Total 20,657,841,807 18,668,583,327
Profit before tax 1,729,616,298 982,203,176
Provision for tax 554,438,774 311,916,578
Profit after tax 1,175,177,524 670,286,598
Surplus in Profit & Loss Account
brought forward from previous year 529,687,717 506,879,134
Available surplus 1,704,865,241 1,177,165,732
APPROPRIATIONS
Your Directors propose to appropriate the available surplus as under :-
Dividend @ 275% (100%)
on 79,330,766 (105,764,355) equity
shares of Rs. 2/- each 436,319,213 211,528,710
Additional tax on Dividend 63,486,460 35,949,305
Transferred to General Reserve 300,000,000 400,000,000
Balance carried to Balance Sheet 905,059,568 529,687,717
TOTAL 1,704,865,241 1,177,165,732
DIVIDEND
Directors recommend a dividend of 175% (Rs. 3.50/- per equity share) for the year. Further, on the occasion of centenary celebrations of Company’s Kirloskarvadi factory, Directors recommend a special dividend of 100% (Rs.2/- per equity share).
SCHEME OF ARRANGEMENT
The Scheme of Arrangement between KBL and Kirloskar Brothers Investments Ltd. (KBIL) and their respective shareholders, has come into effect on March 2, 2010, upon getting all statutory approvals. Pursuant to the said Scheme, certain investments in shares held by KBL, stands
3
606685
987
2266
1152
1483
2084
2240
5073
1694
0
1000
2000
3000
4000
5000
6000
(Rs.
inM
illion)
2006 2007 2008 2009 2010
Year
Net Sales
Net Worth
Import & Export
Earning per Share
9246
1340015251
1830920178
0
5000
10000
15000
20000
25000
(Rs.
inM
illion)
2006 2007 2008 2009 2010
Year
3144
60206621
7091 7134
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
(Rs.
inM
illion)
2006 2007 2008 2009 2010Year
Imports Exports
15.42
31.82
10.41
6.34
14.81
5
10
15
20
25
30
35
(Rs.
)
2006 2007 2008 2009 2010Year
transferred and vested in KBIL without any further act or deed and be deemed to have been transferred to and vested in KBIL. The Company has issued and allotted shares, after reduction of capital to the shareholders pursuant to the Scheme of Arrangement. The trading permission for Company’s shares has been received.
The Board, based on the Honourable Bombay High Court orders, gave effect of capital reduction in terms of Scheme of Arrangement to the 10000 equity shares of Rs. 2/- each, kept in abeyance. Thereafter, the subscribed, issued and paid-up equity shares capital of the Company stands at Rs. 158,661,532/- consisting of 79,330,766 equity shares of Rs. 2/- each.
STATUTORY DISCLOSURES
1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Details of energy conservation, technology absorption, research and development and foreign exchange earnings as required under Section 217 (1) (e) of the Companies Act, 1956, are given in the Annexure - I to this Report.
2. PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with Section 217 (2A) of the Companies Act, 1956 is given in the Annexure – II to this Report.
3. SUBSIDIARY COMPANIES
During the year, the Company ceased to be the subsidiary company of Better Value Holdings Private Limited, one of the promoters and a Kirloskar group Company.
On acquisition of additional shares, with effect from November 12, 2009, Kirloskar Corrocoat Private Limited, Hematic Motors Private Limited, Pressmatic Electro Stampings Private Limited and Quadromatic Engineering Private Limited have become direct subsidiaries of the company alongwith Hematic Motors Private Limited’s subsidiaries viz. ILa Electricals Private Limited, Vakasa Electricals Private Limited and Moreshwar Electricals Private Limited.
On issue of shares in terms of Scheme of Arrangement, as approved by the Honourable High court of Judicature at Bombay, by Kirloskar Brothers Investments Limited (KBIL) to the shareholders of the Company, KBIL ceased to be a subsidiary company of Kirloskar Brothers Limited. Simultaneously, 50000 KBIL equity shares held by KBL also stand cancelled.
In terms of Scheme of Arrangement inter alia, on transfer of investments in Pooja Credits Private Limited and Kirloskar Silk Industries Limited held by Kirloskar Brothers Limited (KBL) to KBIL, these companies also ceased to be subsidiaries of KBL.
On February 15, 2010, KBL has sold the shares held in its Wholly Owned Subsidiary SPP Pumps Limited (SPP) to its other Wholly Owned Subsidiary - Kirloskar Brothers International B.V (KBI) Netherlands. KBI has issued 1000 shares of Euro 100 each to KBL at a premium, towards the consideration for transfer of SPP shares to KBI by KBL. Thus SPP ceased to be the direct subsidiary company of KBL.
On December 9, 2009, the Company made an application to the Central Government under section 212(8) of the Companies Act, 1956 for exemption from attaching the annual accounts of the subsidiary companies. On May 10, 2010 the Government of India, Ministry of Corporate Affairs vide letter No. 47/41/2010-CL-III, granted its approval under section 212(8) of the Companies Act, 1956 for the year ended March 31, 2010.
The consolidated financial statement of subsidiaries prepared as per applicable provisions and duly audited by the statutory auditors, is presented elsewhere in this annual report. As per the said Government approval, instead of the annual accounts of the subsidiary companies, we attach certain information in respect of Company’s subsidiaries for the financial year ended September 30, 2009 / December 31, 2009 / March 31, 2010 as the case may be.
Further, we hereby undertake that annual accounts for the subsidiary companies and the related detailed information will be made available to the shareholders, seeking such information. The annual accounts of
4
the subsidiary companies will also be kept open for inspection for Shareholders and shall be on Company’s website.
4. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors report that
lIn the preparation of the annual accounts, the applicable accounting standards have been followed and there was no material departure from the accounting standards.
lAccounting policies have been selected and applied consistently and that the judgements and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit of the Company for the period April 1, 2009 to March 31, 2010.
lProper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and
lThe annual accounts have been prepared on a going concern basis.
5. CASH FLOW
A cash flow statement for the year ended March 31, 2010 is attached to the Balance Sheet.\
SAFETY, HEALTH AND ENVIRONMENT
The prestigious international certificate OSHAS 18001 has been awarded to Kondhapuri plant of the Company. With this certification, all four of our plants are certified under OSHAS. This is very important step towards ensuring and achieving occupational Health and Safety standards for persons connected with these plants.
The Company continues its thrust on safety measures for employees with regular safety training. Safety audits are also conducted regularly. As a commitment to environment, the Company has selected the sustainability model and formed a core group to address the relevant issues.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, Management Discussion and Analysis Report, Report on Corporate Governance, Auditors' Certificate on Corporate Governance and the declaration by the Chairman and Managing Director regarding affirmations for compliance with the Company’s Code of Conduct are annexed to this report.
During the year the Company has released “Code of Ethics” for all employees.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year 2007-08, Company launched the Employees’ “Share a Vision” Stock Option Scheme, 2007 (ESOS-2007). During the year, the vesting of the II tranche (August 31, 2009) stands cancelled due to non achievement of the performance targets specified in the performance matrix. The exercise price offered is at Rs. 200/- per option to be converted into an equity share on exercise. On October 22, 2009, 10,000 equity shares of Rs. 2/- each have been allotted.
The Management has formulated under ESOS – 2007, a proposal of providing stock options at Rs. 2/- per option to award employee for their outstanding, exemplary performance in getting sustainable results. During the year, 2250 options have been granted to three employees.
After implementation of the Scheme of Arrangement and reduction in capital of the Company, based on spurt in the market price of Company shares, the exercise price of Rs. 200/- per share has not been changed under ESOS.
5
The disclosures required to be made under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and a certificate from the Statutory Auditors with regards to compliance of the guidelines, is provided as Annexure - III to this report.
FIXED DEPOSITS
The Company is neither accepting nor renewing the matured deposits since January, 2003. As on March 31, 2010, deposits from public and shareholders aggregating to Rs. 516,000/- have matured but have not been claimed. The Company has sent reminders for the same.
CORPORATE SOCIAL RESPONSIBILITY
The Company undertakes its social responsibilities through a Trust –Vikas Charitable Trust. The Company has defined policy on Corporate Social Responsibility (CSR). The main thrust is on education and social health. The sphere of activities includes organizing health camps, blood donations programs, education camps at various schools, sponsoring education in various schools and so on.
Company also supports a group of employees - Kirloskar Brothers Eco Group for their activities in the field of working towards green environment.
CENTENARY CELEBRATION
This year witnessed a historic day in the history of our Company. March 10, 2010 was completion of 100 years of our establishment at Kirloskarvadi plant. We have organized various events on that day and the main function was attended by various dignitaries from Corporate and Social fields. More than 9000 people attended functions which were great success.
A few old dealers, employees were felicitated during the function, a book and a film on Kirloskarvadi was released on that day. A few photograph glimpses of the function are published in this report. During the current year Company proposes to have a few more functions at different locations as a part of centenary celebration. We are proud of this legacy and commit ourselves to follow the value systems framed by our founders.
A NEW CORPORATE OFFICE
You are aware that company has built a new corporate office “Yamuna”, which is prominently located on Mumbai-Bangalore highway. It has many unique features of a “Green Building”. We are especially glad to inform you that this building has been achieved a LEED (Leadership in Energy & Environmental Design) platinum rated Green Building status.
This building has many unique features such as design of HVAC (Heating, Ventilation and Air-Conditioning) lighting and external envelope to achieve around 35% saving in the total energy consumption, Solar photovoltaic cells to generate 2.5% of total energy consumed annually, CO2 sensors for monitoring levels and optimizing fresh air intake, Use of 100% STP (Sewage Treatment Plant) treated water for irrigation and so on.
Another advantage of this corporate office is that all our offices are under one roof and we expect that this ensure more efficient working.
DIRECTORS
Mr. Vikram S. Kirloskar, has informed the Company that due to other pre-occupation, he would not be in a position to continue as an Executive Director with effect from January 20, 2010. However, he would continue to be a Director on the Board of the Company.
The Board wishes to place on record its gratitude for the guidance received from Mr. Vikram Kirloskar during his
6
tenure as an Executive Director of the Company.
Mr. Vikram Kirloskar, Mr. U. V. Rao and Mr. M.S. Kirloskar, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.
Subject to Members’ approval, the Board has re-appointed Mr. J.R. Sapre, Whole Time Director with effect from April 29, 2010 upto the period May 31, 2012.
AUDITORS
M/s. P. G. Bhagwat, the Auditors retire at the ensuing Annual General Meeting and are eligible for re-appointment. The requisite certificate pursuant to section 224 of the Companies Act, 1956 has been received. The Audit and Finance Committee has recommended their re-appointment and the annual audit fees.
ACKNOWLEDGMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by banks and financial institutions. Your Directors would further like to record their appreciation of the efforts of every employee for the results achieved during this year.
For and on behalf of the Board of Directors,
SANJAY KIRLOSKAR CHAIRMAN
Pune : May 20, 2010
7
ANNEXURE – I TO THE DIRECTORS' REPORT
A. Conservation of Energy
The Company continues to take additional steps for conservation of energy. The Company introduced Lowest Life Cycle Cost (LLC) series of Pumps in India as Industrial, Water supply & Irrigation Pumping solutions, after the successful launch in European Market. This enabled the Company to provide the Highly Efficient Pumps having benefit of savings in running & maintenance costs. Similarly, Company introduced an Energy Efficient and Corrocoated (EEC) series of Monobloc Pump sets and received excellent responses from Industries as well as Government Projects.
During the year, Company has undertaken following further measures for conservation of energy:
The conventional water supply system for Kirloskarvadi Township converted into Energy Efficient "Hydro-Pneumatic Booster Pumping System" (HYPN) system. The system is Variable Speed controlled (i.e. automatically operated as per flow demand) without any manual intervention. This has facility of remote monitoring and is controlled with latest installed technology Supervisory Control and Data Acquisition.
B. Technology Absorption
1. Research and Development (R&D)
a. Specific area in which R & D carried out by the Company
• Solar Pump set Controller.
• Water mist technology for firefighting application in submarines.
• New product for high pressure and high head application.
• Development of low end chemical process pumps (iCP) with innovative design features like no leakage through stuffing box without using mechanical seal.
• Development of high flow and high head vertical turbine pumps for irrigation purpose.
• Development of double suction metallic volute pumps.
• Development of 3000 mm flap valve, 200 mm siphon air valve,2100 mm turbine inlet butterfly valve.
• Value engineering of Butterfly valve, Kinetic air valve and sluice valve components.
b. Benefits
• Reduction in product lead time and productivity.
• Improved overall quality and reliable performance.
• Innovative design considering user friendly features.
• Performance improvement of the products.
• Reduction in building time of sump model test setup.
c. Future plan of action
• Development of dewatering submersible pump for Marine & Defense application.
• Development of high pressure metallic volute pumps with guide vane arrangement.
• Development of Large flow VT pumps for various power plants.
• In-house development of 200 Ton capacity thrust bearing for high capacity concrete volute pumps.
• Development of 1500 mm sluice valve, Double seal butterfly valve, Duel plate check valves.
d. Expenditure on R & D (Including new product development)
a. Capital Rs. 35.87 M
b. Recurring Rs. 83.12 M
c. Total Rs. 118.99 M
d. Total R & D Expenditure as a Percentage of total turnover 0.59%
8
2. Technology absorption, adaptation and innovation
a. Efforts, in brief, made towards technology absorption, adaptation and innovation.
• Development of low end chemical process pumps without mechanical seal or gland packing yet with zero leakage.
• Development of alternative fabrication construction for large size duplex stainless steel castings.
• Development of largest axial split, double volute pump.
• Development of largest slurry handling pump.
b. Benefits derived as a result of the above efforts
• Due to development of SCT 200/82, 2 stage pump, KBL can offer this pump as an import substitution in Desalination application.
• Due to development of zero leakage pump type i-CP, it is helping in maintaining clean plant and become environment friendly.
• Product range enhancement.
c. Technology imported during the last five years
Technology Imported
Condensate Extract ion pumps from SIHI, Germany
CV and MV Pumps Deep well Pumps
Use of Math CAD for calculations and estimating weight of components from 2D drawings.
Year ofImport
2005
2008
2008
Has technology been fully absorbed?
Yes
Yes
Yes
If not fully absorbed, areas where this has not taken place, reasons therefor and future plan of action
Not applicable
Not applicable
Not applicable
C. Foreign Exchange Earnings and Outgo
Exports Activities :
The Company has achieved export sales of Rs. 1,694 million.
The Company continues to have orders from various African and European countries for irrigation / power / water supply projects. Our efforts continues to establish our brand in European Markets.
In continuation of “Focus Africa” programme, the Company has embarked upon “Food Sufficiency Programme” across Africa with concept to commissioning philosophy. The Company with Triple A Philosophy – Adaptable, Appropriate and Affordable pumping solutions can meet the irrigation needs across Africa to achieve their goals of food sufficiency in phased manner.
The Company is constantly exploring new export markets for its products and also striving to increase the range of products in existing markets and to expand our export market.
Foreign exchange earnings and outgo:
Earnings Rs. 1,920,402,415/-
Outgo Rs. 5,072,684,849/-
The outgo consists of import of large motors which are not available indigenously.
9
ANNEXURE – II TO THE DIRECTORS' REPORT
Information under Section 217(2A) read with Companies (Particulars of employees) Rules, 1975 and forming part of the Directors’ Report for the year ended March 31, 2010.
Name & (Age)
Chapalgaonkar Pradeep G. * (49)
Dabi L.H. (58)
Date Sanjeev Shripad *(60)
Kirloskar Sanjay (53)
Kirloskar Vikram #(51)
Dr. Kshirsagar J. T. (55) Kulkarni Gajanan P. (52)
Maheshwari G. M. * (60)
More Shirish S. (48)
Murthy Ravindra (56)
Nimbalkar D. B. (57)
Pattewar M.R. (47)
Prabhudesai Chandrashekhar K. (60)
Purandare Avinash W. (50)
Rana Y.S. (59) Sapre J. R. (65)
Sathe Anant R. (57)
Shastry Umesh R. (44)
Srivastav Aseem (42)
Srivastava R. K. (63)
Ulavi Umesh V. (53)
Wagh Narendra D. (55)
Designation/ Nature of duties
Vice President – Industry
Vice President – Corp. International Instit
Vice President(Technical) – R & D and Quality
Managing Director
Executive Director
Vice President & Head of Corporate Research & Eng. Development
Vice President & Head – Legal & Company Secretary
Vice President - Domestic & Agricultural Pumps
Associate Vice President & Sector Head - Marine & Defense
Vice President – Distribution
Vice President – Corp. HRM & C
Vice President – Irrigation
Vice President & Head – Corporate Internal Audit
Vice President - Corporate Global Marketing
Vice President -Power
Whole Time Director
Vice President – Corporate Finance & Accounts
Associate Vice President – Corporate Finance & Accounts
Vice President & Operations Head – Dewas & Shirwal
Whole Time Director
Vice President - Business Sector Head – Water Resource Management
Vice President – Industrial Pumps
Gross Remuneration Rs.
3290370
2812965
2867945
34706449
34665534
3670680
2738530
1367911
2466694
3187404
3120392
3137478
2496549
3507894
3540713
11808392
3705874
2910428
2746291
11399250
2568320
3868961
Last employment
CEO, Master Handlers Pvt. Ltd.
-
-
Manager, Kirloskar Cummins Ltd., Pune
-
I.I.Sc, Bangalore
Company Secretary, Kirloskar Pneumatic Company Ltd., Pune
General Manager, Crompton Greaves Ltd.
Indian Navy
VP & SBU Head, Kirloskar Oil Engines Ltd.
Vice President, Traspek Silox, Baroda
Executive Officer, KSB Pumps, Pune
Birla Technology
Consulting Practice Head (SCM), SAP India (P) Ltd., Bangalore
Sr. Marketing Manager, Jyoti Ltd.
Vice President - (MED) Marketing, Kirloskar Oil Engines Ltd., Pune
Sr. Vice President - Finance, Kirloskar Pneumatic Company Ltd., Pune
Emerson Climate Tech. Ltd.
L & T Ltd.
General Manager (Tech), Worthington Pump India Ltd.,Kolkata
VA-TECH WABA LTD
Head – Corp. Mfg. Services, Suzlon Energy Ltd.
# Resigned as Executive Director with effect from 20.01.2010 * Employed for the part of the year
NOTES : 1. Designation denotes the nature of duties also.2. Other terms and conditions are as per the service rules and conditions of the Company.3. The nature of the employment of all the above employees is contractual.4. Gross Remuneration comprises of salary, commission, allowance, medical, other perquisites and companies
contribution to PF and Superannuation funds.5. None of the above employee is a relative of a director of the Company, except Mr. Sanjay Kirloskar, who is a
brother of Mr. Rahul Kirloskar.
10
Qualifications
B.E. (Chem Engg), Dip in Mktg.
B.E. (Mech)
B.E.(Mech)DIIT (Industrial Design)
Bachelor of Science (M.E), Illinois Inst. of Tech. USA
Bachelor of Science (Mech.) MIT, USA
PHD (Engg.), ME (Mechanical)
M.Com, FCS, LLM, CS (London)
BE (Electrical)
BE (Mech), MMS
B.S. (Mech Eng)
B.Com, MSW
B.E. (Mech), DIBM, DBM, MDBA (Mktg)
B.Com CA, CISA
BE (Electrical)
M. Tech. (Design Engg.)
Bachelor of Science
CA, LLB
B. Com, CA,CS
BE (Production), DBM
M. Tech (I.I.T. Bombay)
BE (Mech.) DBM
B.E. (Production Engineering)
Date of commencement of employment & (Experience)
01.04.2004(26)
15.11.1975(35)
20.07.1970(40)
02.05.1983 (32)
06.06.2001(28)
08.10.1996 (31)
01.03.2004(29)
24.02.2004 (38)
01.08.1992(24)
22.05.2008(33)
01.01.2005 (39)
27.08.1992(25)
01.07.2002(36)
01.03.2005(28)
17.02.1997 (31)
01.04.2002 (44)
01.11.2003(34)
01.02.2008(22)
08.06.2004(17)
15.05.1989 (38)
16.02.2009(31)
28.08.2008(32)
ANNEXURE – III TO THE DIRECTORS' REPORT
Disclosures under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 –
Particulars Employees' “Share a Vision” Stock Option Scheme, 2007
a. Number of Options granted 554,500 optionsb. Pricing Formula 552,250 options at Rs.200/- and 2,250 options at Rs.2/-c. Number of Options vested 126,930 optionsd. Number of Options exercised 10,000e. Total number of shares arising out of exercise of Options 10,000f. Number of Options lapsed 246,080 optionsg. Variation in the terms of the Options No variationsh. Money realized by exercise of Options 2,000,000/-i. Total number of Options in force 298,420 optionsj. Employee wise details of options granted to -
i. Senior Management Personnel Noneii. Any other employee who receives a grant in any
one year of option amounting to 5% or more of options granted during the year None
iii. Identified employees who were granted options, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant None
k. Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 – Earnings Per Share Rs. 14.81
l. Where the company has calculated the employee compensation Net Profitcost using the intrinsic value of the stock options, the difference As reported 1,175,177,524between the employee compensation cost so computed and the Add – Intrinsic value 16,098,758employee compensation cost that shall have been recognized if Less – Fair Value 16,330,822it had used the fair value of the options, shall be disclosed. As Adjusted 1,174,945,460The impact of this difference on profits and on EPS of the companyshall also be disclosed. Basic EPS
As reported 14.81 As adjusted 14.81
Diluted EPSAs reported 14.81 As adjusted 14.81
m.1 Weighted average exercise prices for options whose exercise price –i. equals market price Nilii. exceeds market price Niliii. is less than market price Rs. 2
m.2 Weighted fair values for options whose exercise price –i. equals market price Nilii. exceeds market price Niliii. is less than market price (as on grant date) Rs. 197.15
n. A description of the method and significant assumptions used Black Scholes Option Pricing Model using during the year to estimate the fair values of options, including the the following assumptions.following weighted-average information:1. risk free rate 6.16%2. expected life 2.50 years3. expected volatility 59%4. expected dividends and 0.90%5. the price of the underlying share in the market at the
time of option grant. 203.47
AUDITORS' CERTIFICATEWe have examined the books of account and other relevant records and based on the information and explanations given to us, certify that in our opinion, the company has implemented the Employees' "Share a Vision" Stock Option Scheme, 2007, in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and resolution of
ththe Company in the 87 Annual General Meeting held on July 20, 2007. For M/s P. G. BHAGWAT
Chartered Accountants
Pankaja BhagwatPartner Membership No. 86155
Registration No. of the Firm : 101118W
11
Pune : May 20, 2010
REPORT ON CORPORATE GOVERNANCE
1. The Company’s philosophy on Code of Corporate Governance :
The Company strongly believes that the system of Corporate Governance protects the interest of all the stakeholders by inculcating transparent business operations and accountability from management towards fulfilling the consistently high standard of Corporate Governance in all facets of the Company’s operations.
2. Board of Directors :
The Board comprises of an optimal complement of independent professionals as well as Company executives having in-depth knowledge of business. As on the date of this report, there are thirteen directors of whom one is Managing Director, two are Whole Time Directors and ten (77%) are non executive directors of whom seven (54%) are independent directors.
During the financial year under review, five Board meetings were held on the following dates: April 30, 2009, July 17, 2009, October 22, 2009, January 20, 2010 and March 8, 2010.
None of the Directors on the Board hold the office of director in more than 15 companies or membership of committees of the Board in more than 10 committees or chairmanship of more than 5 committees.
The details are explained in the Table below:
Mr. Sanjay Kirloskar and Mr. Rahul Kirloskar are brothers. None of the other directors is related to any other director.
@ CMD – Chairman and Managing Director, VC – Vice Chairman,
NED – Non Executive Director, I – Independent, WTD - Whole Time Director.
* Committee Membership of Audit Committee and Investors’ Grievance Committee is considered for this purpose.
(1) Directorships in Private Limited Companies, Foreign Companies are included in the above table.
(2) An independent director is a non-executive director who, apart from receiving director’s remuneration, does not have any material pecuniary relationship or transactions with the Company, its promoters or its management or its subsidiaries and associates which in the judgement of the Board, may affect his independence of judgement and complying with other conditions as prescribed under Clause 49 of the listing agreement.
(3) All the relevant information suggested under Annexure 1A of Clause 49 is furnished to the Board from time to time.
3. Code of Conduct :
The Company has introduced a Code of Conduct for Directors and members of Senior Management. The Code is made effective from April 1, 2005. It has been uploaded on the Company’s website, www.kbl.co.in.
Mr. Sanjay Kirloskar CMD 5 Present 13 1/0
Mr. Gautam Kulkarni VC/NED 5 Present 6 2/0
Mr. Vikram Kirloskar NED 2 Present 13 4/1(Executive Director up to 20.01.2010)
Mr. M.S. Kirloskar NED (I) 5 Present 0 0/1
Mr. S.N. Inamdar NED (I) 5 Present 12 3/4
Mr. Rahul Kirloskar NED 5 Present 11 1/0
Mr. R.K. Srivastava WTD 5 Present 4 0/0
Mr. U.V. Rao NED (I) 5 Present 4 1/2
Mr. P.S.Jawadekar NED (I) 5 Present 3 1/0
Mr. J.R. Sapre WTD 5 Present 4 0/0
Mr. A.N. Alawani NED (I) 5 Present 6 3/3
Mrs. Lalita D. Gupte NED (I) 5 Present 7 3/1
Mr. Pratap B. Shirke NED (I) 5 Present 10 2/0
Name of Director
Designation / Category of Directorship @
Board Meetings attended
Attendance at last AGM
No. of other Directorships
held
No. of Committees of which Member /
Chairman*
29
All Board members and senior management personnel have affirmed compliance with the code. A declaration to that effect signed by Mr. Sanjay Kirloskar, Chairman and Managing Director is appearing elsewhere in the Annual Report.
4. Audit and Finance Committee :
The Audit and Finance Committee was constituted in July, 2000. This committee is constituted in line with the provisions of Clause 49 of the Listing Agreement read with section 292A of the Companies Act, 1956. It comprised of five Directors viz. Mr. S. N. Inamdar as the Chairman, Mr. Gautam Kulkarni, Mr. U. V. Rao, Mr. P. S. Jawadekar and Mr. Pratap B. Shirke as the Members. Mr. S. N. Inamdar is a Non-Executive Independent Director. Thus the Company fulfils the requirements under the code.
The terms of reference of the Audit and Finance committee include the matters specified in clause 49 (II) of the Listing Agreement with the Stock Exchanges. The terms of reference of the Audit and Finance Committee includes the following:
A)
ØOverseeing the Company’s financial reporting process and disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
ØRecommending the appointment of external auditors, fix their remuneration.
ØReviewing with the management the quarterly & annual financial statements before submission to the Board focusing primarily on
• Any change in the accounting policies & practices.
• Major accounting entries based on exercise of judgement by management.
• Significant adjustments arising out of audit.
ØQualifications in draft audit report.
ØCompliance with Stock Exchanges legal and accounting requirements concerning financial statements.
ØAny related party transactions.
ØStructure & strength of internal audit department reporting structure, coverage and frequency of internal audit, financial & risk management policies particularly relating to foreign exchange exposure.
ØDefaults in the payment to depositors, debenture-holders, shareholders & creditors.
ØReporting by management on key financial ratios.
ØReporting on recovery of dues, delays and reasons therefor.
ØStatements accompanying Public Issue of any security.
ØReporting on branch audits, if any. Full access to information and data.
ØTo obtain outside legal or other professional advice.
ØTo secure attendance of outsiders with relevant expertise, if it considers necessary.
ØApproval of payment to statutory auditors for any other services rendered by statutory auditors.
ØMatters required to be included in the Directors’ Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
ØDiscussion with internal auditors on any significant findings and follow up thereon.
ØReviewing the findings of any internal investigations by the internal auditor into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
ØDiscussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern.
ØCarrying out any other function as per directions from the Board from time to time.
B)
ØPower to investigate
ØPower to summon officers
ØPower to access information and data
ØPower to review systems/controls
During the year, five Audit and Finance committee meetings were held on April 30, 2009, July 17, 2009, September 5, 2009, October 22, 2009 and January 20, 2010.
30
Member's Name No. of Meetings attended Member's Name No. of Meetings attended
Mr. S. N. Inamdar 5 Mr. U. V. Rao 5
Mr. Gautam Kulkarni 5 Mr. Pratap B. Shirke 5
Mr. P. S. Jawadekar 5
Attendance at Audit and Finance Committee meetings :
5. Remuneration of Directors :
Remuneration Committee
The Remuneration committee was constituted in the year 1999. The Members of the committee are as under:-
Mr. P. S. Jawadekar, Chairman, Mr. S. N. Inamdar, Mr. Gautam Kulkarni and Mr. A. N. Alawani
During the year, Remuneration Committee meetings were held on April 30, 2009 and on January 20, 2010.
Attendance at Remuneration Committee Meetings :
Member's Name No. of Meetings attended Member's Name No. of Meetings attended
Mr. P. S. Jawadekar 2 Mr. S. N. Inamdar 2
Mr. Gautam Kulkarni 2 Mr. A. N. Alawani 2
Remuneration to Directors :
•to time and confirmed by the Board of Directors.
• Non Executive Directors were paid a sitting fee of Rs. 10,000/- for every meeting of the Board and Committee attended by them. Based on their membership of various committees and their time involved in the operations of the Company, the non-executive directors will be paid up to an aggregate amount of Rs. 7,025,000/- for the year ended March 31, 2010, by way of a commission.
• There are no pecuniary relationships or transactions of the non-executive directors’ vis-a-vis the Company.
• All elements of remuneration package for all directors have been provided in the statement hereinafter.
• Except whatever is stated in the statement, there is no other fixed component or performance linked incentives to any director.
During the last year, under the Employees’ “Share a Vision” – Stock Option Scheme, 2007 (ESOS-2007), 10,000 equity shares of Rs. 2/- each were issued and allotted to a nominee of a non executive director against stock options granted, at an Exercise price of Rs. 200/- per share.
Subject to the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the terms of the ESOS – 2007, the options granted earlier, after one year of the grant would vest in 3 annual instalments of 30%, 30% and 40% and the same should be exercisable within a period of 3 years from the date of vesting.
I. tranche of options i.e. 30% of the total options have been vested on August 31, 2008. The vesting of the II tranche (August 31, 2009) stands cancelled due to non achievement of the performance targets specified in the performance matrix.
The payments made to executive directors have been reviewed by the Remuneration Committee from time
31
$ subject to approval of Members
* Includes pension as an ex-employee of the company.
Directors' Service Contracts' Details :
Executive Directors Service Contract and Period Severance Fees
Mr.Sanjay Kirloskar Agreement dt.19.11.2005 :: Period: 19.11.05 to 18.11.10 **
Mr.Vikram Kirloskar* Agreement dt.26.07.2006 :: Period: 06.06.06 to 05.06.11 Nil
Mr. R. K. Srivastava Agreement dt.22.10.2005 :: Period: 19.09.05 to 18.09.10 Nil
Mr. J. R. Sapre # Agreement dt.28.07.2005 :: Period: 29.04.05 to 28.04.10 Nil
** Three years or unexpired period, whichever is less. * Resigned as Executive Director with effect from 20.01.2010 # Subject to shareholders approval, Board re-appointed Mr. J. R. Sapre from 29.04.10 to 31.05.12.
Details of remuneration paid/payable to Directors for the year 2009-10 are as follows :
Statement showing number of Equity Shares of Rs.2/- each of the Company after capital reduction in terms of the scheme of arrangement, held by the present Non Executive Directors as on March 31, 2010 :
Non–Executive Directors No. of shares % to paid up capital
Mr.Gautam Kulkarni 2057912 2.594Mr. M. S. Kirloskar 1125 0.001Mr. S. N. Inamdar 32816 0.041Mr. Rahul Kirloskar 2027401 2.556Mr. Vikram S. Kirloskar 70236 0.088Mr. U. V. Rao — —Mr. P. S. Jawadekar — —Mr. A. N. Alawani 7500 0.009Mrs. Lalita D. Gupte — —Mr. Pratap B. Shirke 3000 0.004
Name ofDirector Fees on Profits $ to
StatutoryFunds
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Sitting Commission Salary Contribution Perquisites Others Total
Executive Directors
Mr.Sanjay Kirloskar - 25000000 6487200 1749600 1469649 - 34706449
Mr.R. K. Srivastava - 7000000 2920000 648000 831250 - 11399250
Mr. J.R. Sapre - 8000000 2400000 648000 760392 - 11808392
Non–Executive
Directors
Mr.Vikram Kirloskar - 20205479 9924387 1406265 3129403 - 34665534
(Executive Director
up to 20.01.2010
Mr. Gautam Kulkarni 140000 1150000 - - - - 1290000
Mr. M. S. Kirloskar 70000 350000 - - - 257300* 677300
Mr. S. N. Inamdar 160000 1200000 - - - 250000 1610000
Mr. Rahul Kirloskar 50000 300000 - - - - 350000
Mr. U. V. Rao 110000 1075000 - - - - 1185000
Mr. P.S.Jawadekar 140000 1150000 - - - - 1290000
Mr. A. N. Alawani 110000 450000 - - - - 560000
Mrs. Lalita D. Gupte 50000 300000 - - - - 350000
Mr. Pratap B. Shirke 100000 1050000 - - - - 1150000
32
Company Name Audit Committee Grievance Committee Committee
Kirloskar Systems Limited Member — —
Denso Kirloskar Industries Pvt. Ltd. Member — Member
Kirloskar Toyoda Textile
Machinery Pvt. Ltd. Chairman — Member
Toyata Kirloskar Auto Parts Pvt. Ltd. Member — Member
Toyata Kirloskar Motor Pvt. Ltd. Member — —
Shareholders' Remuneration
6. Particulars of Directors to be re-appointed and appointed at an ensuing Annual General Meeting :
Mr. Vikram S. Kirloskar
Mr. Vikram S. Kirloskar (51) graduated from Massachusetts Institute of technology in the USA with a Bachelor of Science in Mechanical Engineering and has been trained in various Companies in India and abroad in different capacities. He is responsible for setting up successful joint venture companies like Kirloskar Toyoda Textile Machinery Pvt. Ltd. (of which he is Chairman), Toyota Kirloskar Motor Private Limited (the manufacturer of the Toyota Corolla and Toyota Qualis vehicles, of which he is the Vice Chairman) and Toyota Kirloskar Auto Parts Private Limited (of which he is the Vice Chairman). He is also the Chairman & Managing Director of Kirloskar Systems Limited. He has resigned form the position of Executive Director of the Company with effect from 20.01.2010.
Other Directorships
Kirloskar Industries Limited
Kirloskar Pneumatic Co. Limited
Kirloskar Proprietary Limited
Kirloskar Systems Limited
Quadrant Communications Limited
Asara Sales & Investments Private Limited
Denso Kirloskar Industries Private Limited
Kirloskar Technologies Private Limited
Kirloskar Toyoda Textile Machinery Private Limited
Toyata Kirloskar Auto Parts Private Limited
Toyata Kirloskar Motor Private Limited
VikramGeet Investments and Holdings Private Limited
Toyota Tsusho Insurance Brokers India Private Limited
Common Purpose India (Sec 25 Company)
Other Committee positions :
He is holding 70236 (0.088%) Equity Shares of Rs. 2/- each of the Company. He is not related to any other director on the Board of the Company.
Mr. U. V. Rao
Mr. U. V. Rao (80), is former Managing Director and Chief Executive Officer of Larsen and Toubro Limited. He is BE in Electrical Engineering ; Post graduate from Indian Institute of Science, Bangalore in Power Engineering, Post graduate from Bombay University in Industrial Management. He has studied Advanced Management in the Harvard Business School and at Stanford University, USA. He is past President of Indian Electrical and Electronic Manufacturers Association, past Chairman CII (WR), past Honorary Counsel General for Denmark for Western India, past Chairman of Indo-Danish Business Committee, past member of Board of Governors, IIM, Ahmedabad. He is a past member Capital Goods Committee of planning Commission, past member of Development Council for Heavy Electrical Industries and Earth moving machinery, Government of India. Mr. U. V. Rao has nearly four decades of experience in Larsen and Toubro Limited and has worked in various positions in marketing, manufacturing and as Managing Director
33
and CEO. He has won several national & international awards.
He is a Member of Audit & Finance Committee and Committee for Scheme of Arrangement of the Company.
Other Directorships
Kirloskar Engines India Ltd.
TIL Ltd.
Dickinson Fowler Pvt. Ltd.
John Fowler India Pvt. Ltd.
Other Committee positions :
Company Name Audit Committee Grievance Committee Committee
TIL Limited Chairman — Member
Kirloskar Engines India Limited Chairman — —
Shareholders' Remuneration
He is not holding any Equity Shares of the Company. He is not related to any other director on the Board of the Company.
Mr. M. S. Kirloskar
Mr. M. S. Kirloskar (89) graduated from Bombay University and joined Kirloskar Brothers Limited as Assistant Editor for Kirloskar Group of publications. Gradually, he became Chief Editor and also Manager of Kirloskar Press in 1959. He served the Company for more than four decades and retired as a Vice President.
He is a Chairman of Investors’ Grievance Committee of the Company.
He is holding 1125 (0.001%) Equity Shares of Rs. 2/- each of the Company. He is not related to any other director on the Board of the Company.
Mr. J. R. Sapre
Mr. J. R. Sapre (65 years) has served in various positions in Kirloskar Group for more than 30 years. He started his carrier with a defence organisation in Dehradun and Joined Cummins Diesel Sales and Services in 1977. Subsequently, he served Kirloskar Cummins, Kirloskar Industries Limited (Formerly - Kirloskar Oil Engines Limited). He began his carrier with 9 years in Manufacturing and subsequently in reliability, marketing and setting up distribution network. Mr. J. R. Sapre is responsible for Industrial, agriculture and domestic pumps, valves & corporate information centre and corporate global marketing.
Other Directorships
Kirloskar Constructions and Engineers Ltd.,
Kirloskar Brothers International B.V., Netherlands,
Kirloskar Brothers Europe B.V.,
Kirloskar Brothers (Thailand) Ltd.
He is not holding any committee membership. He is not holding any Equity Shares of the Company. He is not related to any other director on the Board of the Company.
7. Shareholders’ / Investors’ Grievance Committee :
Company has Share Transfer, Transmission and Investors’ Grievance Committee. Mr. M. S. Kirloskar, a non-executive independent Director is a Chairman of the Committee. Other members are Mr. A. N. Alawani and Mr. Sanjay Kirloskar.During the year under the report, two Investors’ Grievance committee meetings were held on October 22, 2009 and March 31, 2010. Attendance at Investors’ Grievance Committee meetings :
34
Member's Name No. of Meetings attended
Mr. M.S. Kirloskar 2
Mr. Sanjay Kirloskar 2
Mr. A. N. Alawani 2
Company has always valued its relationship with its stakeholders. This policy has been extended to Investor relationship. Company’s secretarial department is continuously monitoring the complaints / grievances of the investors and is always taking efforts to reduce the response time in resolving the complaints / grievances.
Name and designation of Compliance Officer:
Mr. G. P. Kulkarni, Vice President & Head - Legal and Company Secretary
No. of Shareholders’ complaints received :
The total number of complaints received and replied to the satisfaction of the Shareholders during the year ended March 31, 2010 were 19 and there were no complaints / Share transfers outstanding / Pending as on March 31, 2010.
With reference to clause 47(f) of the Listing Agreement, Company has designated exclusive e-mail ID as grievance.redressal@kbl.co.in for investors to register their grievances, if any. This has been initiated by the Company to resolve such investors’ grievances, immediately. The Company has displayed the said e-mail ID on its website for the use of investors.
35
8. General Body Meetings :
Details of last three Annual General Meetings held :th i) 87 Annual General Meeting July 20, 2007 : 11.00 AM
Tilak Smarak Mandir, Tilak Road, Pune – 411 030.
Special resolutions passed:
• For approval of shareholders for issuing shares under Employee Stock Option Scheme to employees and Directors of the Company.
• For approval of shareholders for issuing shares under Employee Stock Option Scheme to employees and Directors of the subsidiaries.
th ii) 88 Annual General Meeting July 18, 2008 : 11.00 AM Tilak Smarak Mandir, Tilak Road, Pune – 411 030.
Special resolutions passed:
• For approval of shareholders for holding and continue to hold an office or place of profit in the Company as General Manager – Corporate Marketing by Mr. Alok Kirloskar, son of Mr. Sanjay C. Kirloskar, Chairman and Managing Director of the Company.
• For approval of shareholders for increase in remuneration package for Mr. Alok Kirloskar, as General Manager – Corporate Marketing.
th iii) 89 Annual General Meeting July 17, 2009: 11.00 A. M.Yamuna, Survey No.98(3-7),Baner, Pune - 411 045.
Special resolution passed:
• For approval of shareholders for holding and continue to hold an office or place of profit in the Company as Management Trainee – Corporate Global Marketing, Business Development and Strategy Department (CMBS) by Ms. Preeti J. Sapre, daughter of Mr. Jayant R. Sapre, Whole Time Director of the Company.
In the last year, the shareholders’ meeting was convened by the orders of Honourable Bombay High Court, on Saturday, November 7, 2009. At the said meeting shareholders passed resolution approving scheme of arrangement and a special resolution for capital reduction and Re–organization of Share Capital of the Company under scheme through Ballot. The Resolution approving scheme was passed with 100% majority of the members present and validly voted and Special Resolution for capital reduction and Re–organization of Share Capital of the Company was passed with 99.99% majority of the members both in number and in value.
Mr. Jayavant Bhave and Mr. G.G. Palekar were appointed as scrutinisers and have conducted the ballot exercise by following all applicable procedures for ballot under the rules.
36
9. Disclosures :
i. Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large.
There are no materially significant transactions made by the Company with its promoters, directors or the management, their subsidiaries or relatives etc. which have potential conflict with the interest of the Company at large.
ii. Details of non compliance by the Company, penalties and strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years.
None
iii. Whistle Blower Policy and Policy for prevention of sexual harassment at work,
Code of Ethics.
The Company has formulated and implemented the Whistle Blower Policy (“the Policy”) . This would inter alia provide a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit and Finance Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct. Thus, any employee has access to the Audit and Finance Committee.
The Policy has been communicated to all the Employees of the Company and other persons dealing with the Company, through circular/display on the Notice Board/ display on the Intranet. The policy has also been uploaded on the Company website.
Policy for prevention of sexual harassment at work :
The Company has also formulated and implemented the Policy for prevention of sexual harassment at work during the year 2008. This would inter alia provide a mechanism to prevent or deter the commission of acts of Sexual Harassment or inappropriate behaviour at work and to ensure that all employees are treated with respect and dignity. Under the said policy, the procedures for the resolution, settlement or prosecution of acts or instances of Sexual Harassment have also been provided for.
Code of Ethics :
The Company released Company’s “code of ethics” on December 7, 2009. This is one of the important documents of the company and a guide to ethical behaviour for personnel with the Company.
iv. All mandatory requirements of Clause 49 of the Listing Agreement have been complied with by the Company and the extent of adoption of non-mandatory requirements is given hereunder.
Non–Mandatory requirements :
The Board –
The Company has Executive Chairman and the office with required facilities is provided and maintained at the Company’s expenses for use by the Chairman.
No policy has been fixed on tenure of Independent Directors.
Remuneration Committee –
Committee is already in place and complying with related non-mandatory requirements.
Shareholders’ Rights –
The half-yearly financial results are published in the English and Vernacular newspapers and are also displayed on the Company’s website and also have been separately circulated to the shareholders, since half year ended September, 2007.
Audit qualifications –
The Company is already in the regime of unqualified financial statements.
Training of Board Members –
The present Board of Directors is already comprised of well experienced and responsible members of the society and they themselves have represented as faculties to many training institutes.
Mechanism for evaluating Non-executive Board Members –
No specific mechanism is in place in the Company.
37
Whistle Blower Policy -
The Company has a Whistle Blower Policy. It inter alia provides a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit and Finance Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct. It also provides for adequate safeguards against victimisation of such employees. Further, the existence of the mechanism has been appropriately communicated within the organisation.
10. Means of Communication :
• Half yearly reports to each household of shareholders –
The results of the Company are published in national and regional newspapers. The half yearly financial results have been separately circulated to each household of shareholders, since half year ended September, 2007.
• Quarterly results –
The quarterly results are generally published in the newspapers viz. Indian Express, Loksatta and The Hindu - Business Line. These are also displayed on the Company’s website ‘www.kbl.co.in’ shortly after its submission to the Stock Exchanges. The Company’s website also displays official news releases.
• Presentation to Institutional Investors or to analysts -
Generally, presentations are made to analysts on quarterly basis. The annual presentation has been uploaded on the Company’s website.
• Whether the Management Discussion and Analysis Report is a part of Annual Report or not?
The Management Discussion and Analysis Report is a part of the Annual Report.
11. General Shareholder information :th90 Annual General Meeting
Day & Date : Tuesday, July 27, 2010
Time : 11.00 A.M.
Venue : “Yamuna” Survey No.98 (3-7) Baner, Pune – 411 045st stFinancial Year : 1 April to 31 March
Dates of book closure : Saturday, July 17, 2010 to Tuesday, July 27, 2010 (Both days inclusive)
Dividend payment date : On or after August 12, 2010, subject to shareholders’ approval
Listing on Stock Exchanges : The Company’s equity shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited, Mumbai
Listing fees payment : The Annual Listing fees have been paid and there is no outstanding payment towards the stock exchanges, as on date
Stock codes / Symbol : Bombay Stock Exchange Limited – 500241
National Stock Exchange of India Limited – KIRLOSBROS – EQ
ISIN - INE732A01036
38
Performance in comparison to broad based indices - NSE S&P CNX Nifty :
Market Price data :
Performance in comparison to broad based indices - BSE sensex :
M o n t h Quotations on B S E Quotations on N S E High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
April 2009 116.60 75.00 115.70 76.00
May 2009 181.90 96.85 183.70 98.00
June 2009 184.00 135.20 185.00 135.00
July 2009 194.96 161.75 194.45 161.35
August 2009 205.00 172.60 208.00 172.25
September 2009 252.00 185.00 251.00 187.25
October 2009 254.80 200.00 254.45 201.25
November 2009 251.70 208.50 253.00 212.00
December 2009 265.00 235.10 257.00 220.00
January 2010 287.55 233.00 286.80 232.00
February 2010 249.00 222.40 254.80 220.50
March 2010 274.90 241.90 275.00 242.00
39
Registrar and Transfer Agent :
The Company appointed Intime Spectrum Registry Limited, as its Registrar and Transfer Agent (R & T Agent) with effect from April 1, 2003. The name of the R & T Agent has been changed to “Link Intime India Private Limited“ with effect from January 6, 2009, consequent to acquisition of stake in the Intime Spectrum by Link Market Services Group Pty Limited, Sydney, Australia. Share Transfers, dematerialisation of shares, dividend payment and all other investor related activities are attended and processed at the office of the Registrar and Transfer Agent at the following address:-
Link Intime India Private Limited, (Unit: Kirloskar Brothers Limited),
ndBlock No. 202, 2 Floor, Akshay Complex, Near Ganesh Temple, Off Dhole Patil Road, Pune – 411 001 Tel. No. (020) 26053503 Fax No. (020) 26051629 E.mail : pune@linkintime.co.in
Share transfer system :
The authority to approve transfer of shares upto 10000 shares has been delegated to the Company Secretary and Deputy Company Secretary. The proposals for transfer of shares above 10000 shares are placed before the Investors’ Grievance Committee/Board. The share transfers received are processed within 15 days from the date of receipt subject to the transfer instrument being valid and complete in all respects. In compliance with the Listing guidelines, every six months, a practising Company Secretary audits the system of transfer and a certificate to that effect is issued.
Out of total paid-up share capital, 91.67% share capital is held in dematerialised form with National Securities Depository Limited and Central Depository Services (India) Limited as on March 31, 2010.
The Company has established connectivity with both the Depositories through the Registrar, Link Intime India Private Limited.
Members are advised to notify to the Company or Registrar and Transfer Agent, any change of address, immediately.
For the benefit of Members, certain information, procedures and forms, which are being asked for by the Members frequently, viz. Letter about change of address, ECS form, Nomination Form, Indemnity/Affidavit etc. for issue of duplicate certificates, Transmission form, information about shares of Rs. 2/- each after scheme alongwith general FAQs etc. are uploaded on the Company’s website www.kbl.co.in under section “Information for Shareholders”.
Distribution of Shareholding as on March 31, 2010 excluding 10000 equity shares of Rs. 2/- each, kept in abeyance :
Nominal value of shares (In Rupees) holders holders (In Rupees) face value
From To
1 5000 16250 92.90 11147250 7.03
5001 10000 665 3.80 4623060 2.91
10001 20000 321 1.84 4469904 2.82
20001 30000 76 0.43 1882882 1.19
30001 40000 43 0.25 1517152 0.95
40001 50000 21 0.12 949380 0.60
50001 100000 42 0.24 2824310 1.78
100001 Above 74 0.42 131232594 82.72
TOTAL 17492 100.00 158646532 100.00
Number of % to total Total face value % to total
40
Shareholding Pattern as on March 31, 2010 :
Plant locations :
Investor Contacts :
Sr. No. Category No. of shares % of shareholding
1 Promoters’ Holding*
Indian Promoters 41,016,047 51.70
Bodies Corporate 8,341,885 10.52
2 Non Promoters’ Holding
Mutual Funds 5,624,725 7.09
Financial Institutions / Banks 91,143 0.11
Insurance Companies 4,012,375 5.06
Foreign Institutional Investors 985,134 1.24
Private Corporate Bodies 3,282,346 4.14
Indian Public 15,762,444 19.88
Non Resident Indians 207,167 0.26
TOTAL **79,323,266 100.00
*Out of Promoter’s holding, 810,000 shares (1.02%) have been pledged by the Promoters or persons under Promoter Group.
** Out of total paid up equity share capital of 105774355 equity shares of Rs.2/- each before the implementation of scheme of Arrangement, 10000 equity shares, are kept in abeyance and are not considered for reduction purpose under the scheme, for the want of certain procedural compliances.
Outstanding GDRs/ ADRs / warrants or any convertible instruments etc. :
As of date, the Company has not issued these types of Securities.
1. KirloskarvadiKirloskarvadi – 416 308.Dist. Sangli.Tel No. (02346) 222301 – 05,222361 To 222365
3. ShirwalGat No. 117, Shindevadi, Tal. Khandala,Dist. Satara – 412 801.Tel No. (02169) 244360 / 244370 /244322
2. Dewas Opposite Railway Station, Ujjain Road, Dewas – 455 001.Tel No. (07272) 227302 -04
4. KondhapuriGat No. 252/2 + 254/2,Kondhapuri,Tal : Shirur, Dist. Pune – 412 208.Tel No. (02137) 270217 / 270116 /270140
Company Address :Secretarial Department,Kirloskar Brothers Limited,"Yamuna", Survey No. 98 (3-7)Baner, Pune - 411 045Tel. No. (020) 27211030Fax No. (020) 27211136Email : secretarial@kbl.co.ingrievance.redressal@kbl.co.in
Addresses of stock exchanges :Bombay Stock Exchange LimitedPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 Tel. No. (022) 2272 1233Fax No. (022) 2272 2061
Depositories for equity shares :National Securities Depository LimitedTrade World - A Wing, Kamala Mills CompoundLower Parel, Mumbai - 400 013Tel. No. (022) 2499 4200Fax No. (022) 2497 2993 / 6351
Registrar and Transfer Agent :Link Intime India Private Limited,(Unit: Kirloskar Brothers Limited),Block No. 202, 2nd Floor, Akshay Complex,Near Ganesh Temple, Off Dhole Patil Road,Pune - 411 001Tel. No. (020) 26053503Fax No. (020) 26051629E.mail : pune@linkintime.co.in
National Stock Exchange of India LimitedExchange Plaza, Bandra-Kurla Complex,Bandra (East)Mumbai - 400 051Tel. No. (022) 2659 8236Fax No. (022) 2659 8237
Central Depository Services (India) LimitedPhiroze Jeejeebhoy Towers,16th Floor, Dalal StreetMumbai - 400 001Tel. No. (022) 2272 3333Fax No. (022) 2272 3199 / 2072
41
DECLARATION FOR COMPLIANCE WITH CODE OF CONDUCT
To the members of KIRLOSKAR BROTHERS LIMITED Pursuant to Clause 49 I (D) (ii) of the Listing Agreement, I hereby declare that all Board members and senior management personnel are aware of the provisions of the Code of Conduct laid down by the Board and made effective from April 1, 2005. All Board members and senior management personnel have affirmed compliance with the code of Conduct.
For Kirloskar Brothers Limited
Sanjay KirloskarChairman and Managing DirectorPune : May 20, 2010
CERTIFICATE
To the members of KIRLOSKAR BROTHERS LIMITED
We have examined the compliance of conditions of Corporate Governance by KIRLOSKAR BROTHERS stLIMITED for the year ended on 31 March 2010, as stipulated in clause 49 of the Listing Agreement of the said
company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company.
For M/s P. G. BHAGWATChartered Accountants
Pankaja BhagwatPartner
Membership No. Firm's Registration No: 101118W
86155Pune : May 20, 2010
The constituents of ‘Group’ as prescribed in Regulation 3(1)(e)(i) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 comprises Better Value Holdings Private Limited, Kirloskar Industries Limited, Kirloskar Engines India Limited, Kirloskar Pneumatic Company Limited, Kirloskar Ferrous Industries Limited, Pooja Credits Private Limited, Kirloskar Silk Industries Limited, Kirloskar Constructions and Engineers Limited, Gondwana Engineers Limited, The Kolhapur Steel Limited, Kirloskar Corrocoat Private Limited, Kirloskar Systems Limited, Asara Sales & Investments Private Limited, Cees Investments and Consultants Private Limited, Navsai Investments Private Limited, Prakar Investments Private Limited, Alpak Investments Private Limited, Achyut & Neeta Holdings & Finance Private Limited, SriHarihareshwara Finance & Investments Private Limited, VikramGeet Investments and Holdings Private Limited, Kirloskar Integrated Technologies Limited, Kothrud Power Equipment Limited, Koppal Mines & Minerals Private Limited, Kirloskar Proprietary Limited, G. G. Dandekar Machine Works Limited, Mahila Udyog Limited, Kirloskar Chillers Private Limited, Kirloskar Roadrailer Limited, Hematic Motors Private Limited, Pressmatic Electro Stampings Private Limited, Quadromatic Engineering Private Limited, Kirloskar Brothers Investments Limited, Kirloskar Consultants Limited, Suman Kirloskar, Mrinalini Kirloskar, Neeta A. Kulkarni, Atul C. Kirloskar, Arti Kirloskar, Gauri Kirloskar, Aditi Kirloskar, Sanjay C. Kirloskar, Pratima Kirloskar, Alok Kirloskar, Rama Kirloskar, Rahul C. Kirloskar, Alpana Kirloskar, Alika Kirloskar, Aman Kirloskar, Gautam A. Kulkarni, Jyotsna Kulkarni, Nihal Kulkarni, Shruti Kulkarni, Gargi Nihal Kulkarni, Ambar Kulkarni, Komal Kulkarni, Vikram S. Kirloskar, Geetanjali Kirloskar, Manasi Kirloskar, Roopa Gupta and Chandrashekhar H. Naniwadekar.
42
AUDITORS' REPORT TO THE MEMBERS OF KIRLOSKAR BROTHERS LIMITED
st 1. We have audited the attached balance sheet of Kirloskar Brothers Limited as at 31 March, 2010, the profit and loss account and also the cash flow statement of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 [as amended by Companies (Auditor’s Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:
(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) in our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books;
(iii) the balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
st(v) on the basis of the written representations received from the directors as on 31 March, 2010, and taken ston record by the board of directors, we report that none of the directors is disqualified as on 31 March
2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) in our opinion and to the best of our information and according to the explanations given to us, the accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
st(a) in the case of the balance sheet, of the state of affairs of the company as at 31 March, 2010 ;
(b) in the case of the profit and loss account of the profit for the year ended on that date;
(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.
For M/s P. G. BHAGWAT Chartered Accountants
Pankaja BhagwatPartner
Membership No.: Pune : April 26, 2010 Firm’s Registration No: 101118W
86155
43
ANNEXURE Re: Kirloskar Brothers LimitedReferred to in paragraph 3 of our report of even date
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonable intervals. According to information and explanation given to us, no material discrepancies were noticed on such verification.
(c) The fixed assets, which were disposed off during the year, do not form substantial part of the fixed assets owned by the company.
(ii) (a) The inventory was physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.
(iii) (a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained as per section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause 4 (iii) (b) (c) and (d) are not applicable to the company.
(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained as per section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause 4 (iii) (f) and (g) are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of audit we have not observed any continuing failure to correct major weaknesses in internal control system.
(v) (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register to be maintained under that section.
(b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determine whether they are accurate and complete.
(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.
According to information and explanation given to us, no undisputed amounts payable in respect of
44
ststatutory dues were in arrears, as at 31 March, 2010 for a period of more than six months from the date they became payable.
(b) According to information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute other than those mentioned in the Appendix to this report.
st(x) The company has no accumulated losses as at 31 March, 2010. The company has not incurred cash losses during the financial year and in the immediately preceding financial year.
(xi) In our opinion and according to information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank. The company has no debenture holders.
(xii) According to information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xiv) According to information and explanation given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xv) In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.
(xvii) According to information and explanation given to us, we report that no funds raised on short-term basis have been used for long-term investment.
(xviii) According to information and explanation given to us, the company has not made any preferential allotment of any shares to parties and companies covered under section 301 of the Companies Act, 1956.
(xix) According to information and explanation given to us, the company has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xx) According to information and explanation given to us, the company has not made any public issue to raise money. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xxi) According to information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.
For M/s P. G. BHAGWAT Chartered Accountants
Pankaja BhagwatPartner
Membership No.: Pune : April 26, 2010 Firm’s Registration No: 101118W
86155
Sr. Name of the Statue Nature of Dues Rs. in Forum where dispute is
No. million
1 The Central Sales Tax Act, 1956 Central Sales 0.24
Tax 0.69 Deputy Commissioner
9.70 Assistant Commissioner
2 Sales Tax acts of respective State Sales Tax 1.55 A. P. tribunal
States 67.47 State High courts
0.81 Appellate Deputy Commissioner
0.17 Appellate Assistant Commissioner
8.37 Assistant Commissioner
3 Central Excise Act, 1944 Excise duty 1.13 Delhi Tribunal
21.73 Commissioner
2.22 Joint Commissioner
2.68 Additional Commissioner
1.66 Deputy Commissioner
1.22 Assistant Commissioner
4 The Income Tax Act, 1961 Income tax 522.43 Commissioner of Income tax
(Appeals)
pending
Additional Commissioner
45
Appendix (Referred to in clause (ix) (b) of the annexure to the Auditors' Report.)
BALANCE SHEET AS AT MARCH 31, 2010
Schedule 2010 2009 Rupees Rupees
SOURCES OF FUNDS :
Shareholders’ FundsCapital 1 158,666,532 211,528,710 Reserves and Surplus 2 6,905,153,824 6,787,799,285 Employee Stock Options outstandings 76,990,608 121,855,582 Less : Deferred employee compensation expense 7,049,214 29,787,458
69,941,394 92,068,124 7,133,761,750 7,091,396,119
Loan FundsSecured Loans 3 774,286,994 1,808,661,549 Unsecured Loans 4 2,798,099,225 1,395,682,632
3,572,386,219 3,204,344,181 Deferred Tax-net 5 79,525,041 65,086,267
Total 10,785,673,010 10,360,826,567 APPLICATION OF FUNDS :
Fixed Assets 6Gross Block 4,250,686,221 3,349,492,805 Less: Depreciation 1,537,955,989 1,298,156,225 Net Block 2,712,730,232 2,051,336,580 Capital work-in-progress including capital advances 213,978,175 704,733,584
2,926,708,407 2,756,070,164
Intangible Assets 7 Gross Block 99,438,292 87,657,961 Less: Amortization 85,524,778 77,713,190 Net Block 13,913,514 9,944,771
Investments 8 1,902,989,166 3,383,750,571
Current Assets, Loans & Advances Inventories 9 1,790,311,801 1,556,655,133 Gross amount due from customers for project related contract work 10 2,570,500,409 2,244,317,546 Sundry debtors 11 5,997,515,281 6,126,484,258 Cash and bank balances 12 965,908,313 99,949,039 Other current assets 13 648,483,016 437,059,763 Loans and advances 14 3,969,342,427 3,238,063,251
15,942,061,247 13,702,528,990 Less: Current Liabilities & ProvisionsCurrent Liabilities 15 8,548,384,664 8,292,534,699 Gross amount due to customers for project related contract work 16 708,009,373 681,146,885 Provisions 17 743,605,287 517,786,345
9,999,999,324 9,491,467,929 Net Current Assets 5,942,061,923 4,211,061,061
Total 10,785,673,010 10,360,826,567
Notes to Accounts 25
The schedules referred to above and the notes to accounts form an integral part of the Balance Sheet
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance) PUNE : April 26, 2010 PUNE : April 26,2010
PANKAJA BHAGWAT
46
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule 2010 2009
Rupees Rupees
INCOME
Sales 18 20,178,370,074 18,309,447,980
Other income 19 479,471,733 359,135,347
Total 20,657,841,807 18,668,583,327
EXPENDITURE
Materials consumed 20 14,986,907,001 13,999,547,928
Payments and benefits to employees 21 895,284,067 943,816,573
Operating and other expenses 22 2,447,688,216 2,237,392,425
Interest 23 335,636,561 303,200,468
Depreciation and amortization 264,766,724 207,350,133
18,930,282,569 17,691,307,527
Less: Expenses capitalized 2,057,060 4,927,376
Total 18,928,225,509 17,686,380,151
Profit/(Loss) before tax 1,729,616,298 982,203,176
Provision for tax 24 554,438,774 311,916,578
Profit/(Loss) after tax 1,175,177,524 670,286,598
Balance brought forward from previous year 529,687,717 506,879,134
Profit available for appropriation 1,704,865,241 1,177,165,732
Appropriations
Proposed dividend 436,319,213 211,528,710
Additional tax on dividend 63,486,460 35,949,305
Transfer to General Reserve 300,000,000 400,000,000
Surplus carried to Balance Sheet 905,059,568 529,687,717
1,704,865,241 1,177,165,732
Basic Earning per Equity Share (Refer Note No.12) 14.81 6.34
Diluted Earning per Equity Share (Refer Note No.12) 14.81 6.34
Notes to Accounts 25
The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance) PUNE : April 26, 2010 PUNE : April 26,2010
PANKAJA BHAGWAT
47
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
2010 2009 Rupees Rupees
A. Cash flow from operating activities
Net profit before taxation and extraordinary items 1,729,616,298 982,203,176
Adjustments for
Depreciation and amortization 264,766,724 207,350,133
(Profit) / loss on sale of fixed assets (472,646) (983,694)
Employees Stock Option - Compensation debited / (credited) to
Profit and Loss Account ( Net ) (19,518,730) 48,033,482
Provision for doubtful debts and advances 81,704,587 70,609,776
Interest income (36,720,128) (101,943,584)
Dividend income (83,435,333) (145,191,738)
Interest expenses 335,636,561 303,200,468
Investment written off 500,000 -
Unrealised exchange (gain) / Loss 16,559,956 (13,556,421)
Profit on sale of investment (224,793,816) -
Operating profits before working capital changes 2,063,843,473 1,349,721,598
(Increase)/decrease in trade and other receivables (867,718,911) (2,487,101,162)
(Increase)/decrease in inventories (233,656,668) (226,769,049)
Increase/(decrease) in sundry creditors 231,657,573 1,788,333,088
Cash generated from operations 1,194,125,467 424,184,475
Income tax (paid) /refunded (888,321,595) (292,878,843)
Net cash from operating activities 305,803,872 131,305,632
B. Cash flow from investing activities
Purchase of fixed assets (441,340,564) (1,022,765,402)
Proceeds from sale of fixed assets 2,439,500 5,646,013
(Purchase)/Sale of investments 1,089,567,731 89,196,736
Interest received 73,510,847 104,210,047
Dividends received 33,373,433 141,577,338
Advance to subsidiaries (37,474,035) (628,364,767)
Net cash from investing activities 720,076,912 (1,310,500,035)
C. Cash flow from financing activities
(Repayment)/proceeds of/from long term borrowings (net) 1,742,093,735 676,705,456
(Repayment)/proceed of/from other borrowings (net) (1,339,963,254) 615,600,791
Interest paid (306,147,399) (298,642,337)
Dividends paid (207,624,262) (414,907,037)
Tax on dividend paid (35,949,305) (71,898,609)
Increase in Share Capital 20,000 -
Increase in Share Premium 1,980,000 -
Net cash used in financing activities (145,590,485) 506,858,264
Unrealised exchange gain / (loss) in cash and cash equivalents (14,331,025) 13,556,421
Net increase in cash and cash equivalents 880,290,299 (672,336,139)
Cash and cash equivalents at the beginning of the year 99,949,039 758,728,757
Cash and cash equivalents at the end of the year 965,908,313 99,949,039
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance) PUNE : April 26, 2010 PUNE : April 26,2010
PANKAJA BHAGWAT
48
SCHEDULE TO THE ACCOUNTS
2010 2009Rupees Rupees
SCHEDULE 1: SHARE CAPITAL *
Authorized
250,000,000 ( 250,000,000 ) equity shares of Rs.2/- (Rs.2/-) each 500,000,000 500,000,000
500,000,000 500,000,000
Issued
79,323,266 (105,907,030) equity shares of Rs.2/- each (Rs.2/-) each 158,646,532 211,814,060
(after capital reduction, as per scheme of arrangement)
10,000 (-) equity shares of Rs.2/- each** (Rs.2/-) each 20,000 -
158,666,532 211,814,060
Subscribed and paid up
79,323,266 (105,764,355) equity shares of Rs.2/- each (Rs.2/-) each 158,646,532 211,528,710
10,000 (-) equity shares of Rs.2/- each ** (Rs.2/-) each 20,000 -
158,666,532 211,528,710
Out of the above
(i) 123,750 (165,000) equity shares of Rs.2/- (Rs.2/-) each
were allotted as fully paid up pursuant to contract for consideration
other than cash.
(ii) 66,374,981 (88,499,975) shares of Rs.2/- (Rs.2/-) each
were allotted as fully paid up bonus shares by
capitalisation of General Reserve and Share Premium
(iii) Nil (52,694,805) shares of Rs.2/- (Rs.2/-) each
held by Better Value Holdings Pvt. Limited ,
the erstwhile holding Company.
* [Refer note no. B - 31]
** kept in abeyance [Refer note no. B - 31]
158,666,532 211,528,710
SCHEDULE 2 : RESERVES AND SURPLUS
Capital Reserve 172,443 172,443
Capital Redemption Reserve 4,000,000 4,000,000
Share Premium Account
Balance as per last account 395,881,752 395,881,752
Add: Premium on shares issued during the year 4,588,000 -
400,469,752 395,881,752
General Reserve
Balance as per last account 5,858,057,373 5,458,057,373
Less : Transfer as per scheme of arrangement
[Refer Note No - B - 31] 615,487,490 -
Add : Reduction in capital as per scheme of arrangement
[Refer Note No - B - 31] 52,882,178 -
Add : Transfer from Profit and Loss Account 300,000,000 400,000,000
5,595,452,061 5,858,057,373
Profit and Loss Account 905,059,568 529,687,717
6,905,153,824 6,787,799,285
49
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees Rupees
SCHEDULE 3 : SECURED LOANSLoans and advances from banks
Cash / Export Credit facilities 323,243,747 1,663,207,001
[Secured by hypothecation of tangible movable assets
and book debts of the Company]
Other loans and advances
External Commercial Borrowing from
Credit Agricole Corporate & Investment Bank 451,043,247 -
[Secured by hypothecation of movable
fixed assets and mortgage of immovable
properties of the Company (both present and future)].
From Exim bank - 145,454,548
[Secured by hypothecation of movable
fixed assets and mortgage of immovable
properties of the Company (both present and future)].
774,286,994 1,808,661,549
SCHEDULE 4 : UNSECURED LOANS
Interest free loan under Sales Tax Deferral Scheme 55,462,632 55,462,632
Inter Corporate Deposits - 40,000,000
Short Terms Loans and advances from Banks :
Foreign Currency Short term Loans and advances 1,942,636,593 230,220,000
Rupee Short term Loans and advances 800,000,000 1,070,000,000
2,798,099,225 1,395,682,632
SCHEDULE 5 : DEFERRED TAX-NET
Deferred Tax Liabilities
On depreciation/amortization of fixed assets 182,502,323 165,499,236
182,502,323 165,499,236
Deferred tax assets
On employees voluntary retirement schemes 65,107 441,770
On provision for doubtful debts/advances 64,439,710 47,465,723
Provision for employee benefits 36,880,796 50,669,592
Other timing differences 1,591,669 1,835,884
102,977,282 100,412,969
79,525,041 65,086,267
50
SCHEDULE 6 : FIXED ASSETS Rupees
Land Free/ Buildings Railway Plant & Furniture & Vehicles Total Previous Lease Hold Siding Machinery Fittings Year
Gross Block
At 01.04.2009 209,902,536 620,999,330 1,536,325 2,384,551,435 79,250,104 53,253,075 3,349,492,805 2,743,820,288
Additions - 398,030,725 - 476,974,157 33,313,127 11,997,633 920,315,642 636,678,036
Deductions - - - 17,365,086 469,444 1,287,696 19,122,226 31,005,519
At 31.03.2010 209,902,536 1,019,030,055 1,536,325 2,844,160,506 112,093,787 63,963,012 4,250,686,221 3,349,492,805
Depreciation / Amortization
At 01.04.2009 - 85,528,841 1,424,830 1,151,300,293 36,038,276 23,863,985 1,298,156,225 1,124,758,974
For the year - 22,022,410 35,652 220,264,159 9,723,277 4,909,638 256,955,136 199,740,451
Recouped - - - 16,405,257 136,326 613,789 17,155,372 26,343,200
At 31.03.2010 - 107,551,251 1,460,482 1,355,159,195 45,625,227 28,159,834 1,537,955,989 1,298,156,225
Net Block
At 31.03.2010 209,902,536 911,478,804 75,843 1,489,001,311 66,468,560 35,803,178 2,712,730,232 2,051,336,580
Assets under Erections 213,978,175 704,733,584
including capital advances
At 31.03.2010 209,902,536 911,478,804 75,843 1,489,001,311 66,468,560 35,803,178 2,926,708,407 2,756,070,164
At 31.03.2009 209,902,536 535,470,489 111,495 1,233,251,142 43,211,828 29,389,090 2,051,336,580
2010 2009Rupees Rupees
SCHEDULE 7: INTANGIBLE ASSETS - COMPUTER SOFTWARE
Gross Block
At 01.04.2009 87,657,961 83,947,687
Additions 11,780,331 3,710,274
Deductions - -
At 31.03.2010 99,438,292 87,657,961
Amortization
At 01.04.2009 77,713,190 70,103,508
For the year 7,811,588 7,609,682
Recouped - -
At 31.03.2010 85,524,778 77,713,190
Net Block At 31.03.2010 13,913,514 9,944,771
SCHEDULE TO THE ACCOUNTS (CONTD.)
51
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees RupeesSCHEDULE 8 : INVESTMENTS
Long Term Investments (At cost)
A. Trade
Quoted
Nil (73,903,270) equity shares of Rs.2/- each in Kirloskar Industries Ltd. * - 404,980,851
(formerly - Kirloskar Oil Engines Ltd.)
Nil (4,547,254) equity shares of Rs. 10/- each
in Kirloskar Pneumatic Company Ltd. * - 125,655,633
- 530,636,484
Unquoted
2 (2) equity share of Rs.100/- each in Kirloskar Proprietary Ltd. 200 200
Nil (1,272) ordinary shares of K. Sh. 1,000/- each
in Kirloskar Kenya Ltd.* - 850,662
225,000 (225,000) equity shares of Rs. 10/- each
in Kirloskar Ebara Pumps Ltd. 2,747,272 2,747,272
Nil (112,500) equity shares of Singapore $ 1/- each
in Kirsons Trading Pte Ltd. * - 2,525,731
2,747,472 6,123,865
B. Other than trade
Quoted
Nil (400) equity shares of Rs. 10/- each
in Housing Development Finance Corporation Ltd. * - 9,500
Nil (1,081 ) equity shares of Rs. 10/- each in I C I C I Bank Ltd. * - 100,000
Nil (60,000) equity shares of Rs. 5/- each in Kulkarni Power Tools Ltd. * - 301,500
- 411,000
Unquoted
Nil (1) equity share of Rs. 50/- each
in Maharashtra State Co-operative Bank Ltd. * - 53
Nil (100) equity shares of Rs. 5,000/- each
in Kranti Sahakari Sakhar Karkhana Ltd. * - 500,000
Nil (2,597,760) equity shares of Rs.10/- each
in Kirloskar Toyoda Textile Machinery Ltd. * - 26,107,490
- 26,607,543
52
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees Rupees
C. In Subsidiary Companies Unquoted
Fully Paid Up Nil (3,445,477) equity shares of Rs.10/- each in Pooja Credits Private Ltd. * - 34,454,770
Nil (1,950,000) equity shares of GBP 1/- each in SPP Pumps Ltd. ** - 149,226,964
Nil (2,000,130) equity shares of Rs. 10/- each in Kirloskar Silk Industries Ltd. * - 20,001,300
16,150,002 (6,150,002 ) equity shares of Rs. 10/- each in Kirloskar Constructions and Engineers Ltd. 713,300,000 613,300,000
40,160 (40,160) equity shares of Rs. 100/- eachin Gondwana Engineers Ltd. 76,360,000 76,360,000
16,311,083 (16,311,083) equity shares of Rs. 1/- eachin The Kolhapur Steel Ltd. 93,843,591 93,843,591
90,375 (24,000) equity shares of Rs. 10/- eachin Quadromatic Engineering Pvt. Ltd. 30,130,888 240,000
29,358 (10,472) equity shares of Rs. 100/- each in Hematic Motors Pvt. Ltd. 217,371,299 10,446,862
23,370 (8,325) equity shares of Rs. 100/- eachin Pressmatic Electro Stampings Pvt. Ltd. 266,918,468 4,281,802
3,250,000 (2,500,000) equity shares of Rs. 10/- each in Kirloskar Corrocoat Pvt. Ltd. 94,000,000 25,000,000
1,000 (-) ordinary equity shares of Euro 100/- each in Kirloskar Brothers International B V 374,020,780 -
1,000,000 fully paid (1,000,000 partly paid) common shares of Baht 10/- each in Kirloskar Brothers (Thailand) Ltd. 13,288,951 3,209,673
Partly Paid up 2,000 (2,000 ) ordinary equity shares of Euro 100/- each
in Kirloskar Brothers International B V 10,007,717 8,606,717 [Amount paid per share Euro 80 (Euro 70) each]
* [Refer note No B - 31] ** [Refer note No B-34] 1,889,241,694 1,038,971,679
D. Government Securities UnquotedNil (88,000 ) Non Convertible Redeemable Taxable Bonds - Series -VI of Rs.10,000/- - 880,000,000 each of Rural Electrification Corporation Ltd.
Nil (89,000) Non Convertible Redeemable Taxable Bonds - of Rs.10,000/- - 890,000,000 each of National Highways Authority of India.
- 1,770,000,000
E. Other Investment 353,737 (350,685) Units of Rs. 20/- each
of HDFC Group Unit Linked Option Plan B 11,000,000 11,000,000 1,902,989,166 3,383,750,571
Aggregate amount of quoted investments - 531,047,484 Market value - 4,924,683,428 Aggregate amount of unquoted investments 1,902,989,166 2,852,703,087
53
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees Rupees
Raw materials and components 502,639,127 587,376,486
Stores and spares 34,081,527 38,453,275
Work-in-progress 1,036,813,733 689,028,964
Finished goods 216,777,414 241,796,408
1,790,311,801 1,556,655,133
SCHEDULE 10 : GROSS AMOUNT DUE FROM CUSTOMERS
FOR PROJECT RELATED CONTRACT WORK
Cost incurred plus recognized profits less recognized losses 34,952,619,379 26,107,504,191
Less: Progress billing 32,382,118,970 23,863,186,645
2,570,500,409 2,244,317,546
SCHEDULE 11 : SUNDRY DEBTORS
Debts outstanding for a period exceeding six months
Unsecured, considered good 1,757,481,051 1,722,506,860
Considered doubtful 184,321,649 129,977,452
Other debts
Unsecured, considered good 4,240,034,230 4,403,977,398
6,181,836,930 6,256,461,710
Less: Provision for doubtful debts 184,321,649 129,977,452
5,997,515,281 6,126,484,258
SCHEDULE 12 : CASH AND BANK BALANCES
Cash on hand 1,268,855 934,370
Balances with scheduled banks
On current accounts 453,752,438 92,661,428
On deposit accounts 5,500,000 6,225,000
Balances with other banks
On current accounts 2,381,679 128,241
On deposit accounts 503,005,341 -
965,908,313 99,949,039
Names of other banks Current / Deposit Maximum account balance
On current accounts
Bank Atlantic - USA 564,668 1,908,200
Previous year (128,241) (3,114,363)
Vietcom Bank 329,422 2,369,108
Previous year (-) (-)
Societe Arabe Internationale De Banque Egypt 1,165,986 137,735,608
Previous year (-) (-)
Credit Agricole Corporate & Investment Bank 321,603 230,231,764
Previous year (-) (-)
On deposit accounts
Societe Arabe Internationale De Banque Egypt 52,005,341 52,005,341
Previous year (-) (-)
Credit Agricole Corporate & Investment Bank 451,000,000 451,000,000
Previous year (-) (-)
SCHEDULE 9 : INVENTORIES
54
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees Rupees
SCHEDULE 13 : OTHER CURRENT ASSETS
Interest accrued on investments 2,195,054 38,985,773
Dividend due from subsidiary companies 54,077,900 4,016,000
Claims receivable 592,210,062 394,057,990
648,483,016 437,059,763
SCHEDULE 14 : LOANS AND ADVANCES
Unsecured considered good
Advances and loans to subsidiaries 727,521,252 690,047,217
Advances recoverable in cash or kind or for
value to be received 1,793,133,076 1,934,276,003
Considered doubtful 9,668,689 9,668,689
Balances with customs, excise, etc. 369,279 850,416
Deposit with railways, post and others 1,072,565,033 585,457,423
Advance Income tax (net of Provision for tax) 375,753,787 27,432,192
3,979,011,116 3,247,731,940
Less: Provision 9,668,689 9,668,689
3,969,342,427 3,238,063,251
SCHEDULE 15 : CURRENT LIABILITIES
Acceptances 12,651,080 81,637,916
Sundry Creditors
(i) Total outstanding dues to Micro Small and Medium
Enterprises (Refer Note no B - 15) - -
(ii) Total outstanding dues of other creditors other than
Micro Small and Medium Enterprises 5,511,600,071 5,837,628,090
5,511,600,071 5,837,628,090
Subsidiary companies 285,226,349 218,812,780
Advances and deposits from customers 2,552,387,233 2,032,953,297
Items covered by Investor Education and Protection Fund
(a) Unpaid dividend 48,591,516 44,687,068
(b) Unpaid Matured Deposits 516,000 913,000
Other liabilities 80,399,289 48,378,584
Interest accrued but not due on loans and advances 57,013,126 27,523,964
8,548,384,664 8,292,534,699
SCHEDULE 16 : GROSS AMOUNT DUE TO CUSTOMERS FOR
PROJECT RELATED CONTRACT WORK
Progress billing 7,525,237,830 6,364,273,849
Less: Cost incurred plus recognized profits less recognized losses 6,817,228,457 5,683,126,964
708,009,373 681,146,885
55
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees Rupees
SCHEDULE 17 : PROVISIONS
Proposed dividend 436,319,213 211,528,710
Additional tax on dividend 63,486,460 35,949,305
Provision for product warranties 43,387,708 31,856,656
Provision for leave encashment 183,971,128 219,193,903
Provision for pension benefits (Ex-employees) 16,440,778 19,257,771
743,605,287 517,786,345
SCHEDULE 18 : SALES AND CONTRACT REVENUE
Sales (Gross) 10,445,666,223 10,158,965,921
Less: Excise duty recovered 383,203,278 577,912,640
10,062,462,945 9,581,053,281
Project related revenue 10,115,907,129 8,728,394,699
20,178,370,074 18,309,447,980
SCHEDULE 19 : OTHER INCOME
Income from investments
Interest from long term Investments
[Tax deducted at source Rs.Nil (Rs.Nil)] 36,720,128 100,845,915
Dividend income
(a) Trade investment 23,963,700 125,903,748
(b) Subsidiaries 54,077,900 19,176,099
(c) Other investments - long term 5,393,733 111,891
Profit on sale of investments 224,793,816 -
Other Interest Received [(Tax Deducted Rs. Nil (Rs. 284,786/- )] - 1,097,669
Profit on sale of fixed assets 1,454,128 3,802,079
Royalty received 643,505 1,334,443
House rent 743,217 752,868
Recovery of bad debts 77,085,738 51,449,253
Miscellaneous income 54,595,868 54,661,382
479,471,733 359,135,347
SCHEDULE 20 : MATERIALS CONSUMED
Raw materials consumed 9,388,550,833 8,817,342,405
Stores and spares consumed 363,008,800 372,510,773
Processing charges 321,524,806 295,920,126
Purchase of traded goods 5,236,588,337 4,765,472,081
15,309,672,776 14,251,245,385
(Increase) / Decrease in stocks
Opening stock
Work-in-progress 689,028,964 456,663,554
Finished goods 241,796,408 222,464,361
930,825,372 679,127,915
Closing stock
Work-in-progress 1,036,813,733 689,028,964
Finished goods 216,777,414 241,796,408
1,253,591,147 930,825,372
(322,765,775) (251,697,457)
14,986,907,001 13,999,547,928
56
SCHEDULE TO THE ACCOUNTS (CONTD.)2010 2009
Rupees Rupees
SCHEDULE 21 : PAYMENTS AND BENEFITS TO EMPLOYEES
Salaries, wages and bonus 766,748,690 848,551,428
Contribution to provident fund and E.S.I. 50,678,337 43,120,522
Gratuity 10,256,965 (11,464,808)
Welfare expenses 68,407,068 59,273,910
Pension Benefits (806,993) 4,335,521
895,284,067 943,816,573
SCHEDULE 22: OPERATING AND OTHER EXPENSES
Power & fuel 118,627,103 134,006,775
Repairs and maintenance
Plant and machinery 78,668,325 72,670,281
Buildings 85,397,277 35,704,584
Rent 43,294,796 47,467,732
Rates and taxes 11,016,724 8,364,155
Travel and conveyance 229,118,034 236,536,638
Postage and telephone 45,581,194 43,997,577
Insurance 120,150,274 113,391,932
Directors' sitting fees 930,000 970,000
Directors' remuneration 94,199,572 62,015,136
Royalties and fees 50,469,341 47,987,895
Cash discount 73,761,367 31,074,891
Freight and forwarding charges 193,658,158 205,174,284
Brokerage and commission 252,166,244 264,427,519
Advertisements and publicity 252,380,089 70,427,837
Provision for product warranty 68,135,918 44,854,966
Excise duty paid 13,279,838 15,995,473
Bank charges 130,770,169 129,594,989
Loss on sale/disposal of fixed assets 981,482 2,818,385
Bad debts written off 2,228,601 4,288,396
Provision for doubtful debts and advances 81,704,587 70,609,776
Donations 18,114,000 5,249,294
Investment written off [Refer note no - B - 31] 500,000 -
Other miscellaneous expenses 482,555,123 589,763,910
2,447,688,216 2,237,392,425
SCHEDULE 23 : INTEREST
Interest
On fixed loans and debentures 84,287,132 46,403,973
On other loans 251,349,429 256,796,495
335,636,561 303,200,468
SCHEDULE 24 : PROVISION FOR TAX
Income tax for the year
Current 540,000,000 306,000,000
Deferred 14,438,774 (13,083,422)
Fringe Benefit Tax - 19,000,000
554,438,774 311,916,578
57
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS
A) Significant Accounting Policies
1 Basis of preparation of financial statements
a) The financial statements have been prepared to comply in all material respects with The Companies
(Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.
b) The financial statements have been prepared under the historical cost convention on an accrual basis.
c) The accounting policies applied by the Company are consistent with those used in the previous year.
2 Fixed Assets
Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any other
attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to
acquisition of qualifying fixed assets are also included to the extent they relate to the period till such assets are ready
to be put to use.
3 Depreciation
Depreciation on fixed assets has been provided in a manner that amortizes the cost of the assets over their estimated
useful lives as detailed below:
a) On assets acquired prior to 01.08.1987, on a straight-line method at the rates determined in the year of
acquisition under section 205 (b) of the Companies Act, 1956. No depreciation is provided on assets scrapped
or sold during the year.
b) On assets other than patterns, acquired on or after 01.08.1987, on straight line method as per Schedule-XIV to
the Companies Act, 1956.
c) On patterns, on straight line method on the basis of estimated useful life as given below:
Sr. Particulars Rate of No. Depreciation
1 Patterns with estimated useful life of less than one year & one time use. 100%
2 Patterns with estimated useful life of more than one year but less than eight years. 20%
3 Patterns with estimated useful life of more than eight years. 11.31%
4 Intangible Assets
Computer Software
Computer software is amortized on straight line method over a period of three years.
5 Inventories
a) Inventories are valued at the lower of cost and net realizable value.
b) The cost is calculated on weighted average method.
c) Cost comprises costs of purchase, costs of conversion and other costs incurred in bringing the inventories to
their present location and condition.
6 Construction Contracts
a) Contract revenue and contract costs arising from fixed price contracts are recognized in accordance with the
percentage of completion method.
b) The stage of completion is measured by reference to costs incurred to date as a percentage of total estimated
costs for each contract.
c) Full provision is made for any loss in the year in which it is first foreseen.
58
7 Research and Development
Research and development costs are expensed as incurred, except for development costs which relate to the design
and testing of new or improved materials, products or processes which are recognized as an asset to the extent that it
is expected that such assets will generate future economic benefits.
8 Revenue Recognition
a) Sale of products and services are recognized when the significant risks and rewards of ownership of the
goods have passed to the buyer and when services are rendered.
b) Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any
claim, revenue recognition is postponed to the extent of uncertainty involved. In such cases revenue is
recognized only when it is reasonably certain that the ultimate collection will be made.
9 Foreign Currency Transactions
a) Initial Recognition: Transactions denominated in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction.
b) Conversion: At the year end, monetary items denominated in foreign currencies other than those covered by
forward contracts are converted into rupee equivalents at the year-end exchange rates.
c) Forward Exchange Contracts: In respect of transactions covered by forward exchange contracts, the
difference between the forward rate and the exchange rate at the date of the transaction is recognized as
income or expense over the life of the contract.
d) Exchange Differences: All exchange differences arising on settlement/conversion on foreign currency
transactions are included in the Profit and Loss Account.
e) Foreign entities: Assets and liabilities of foreign entities are translated into rupee equivalents using year-end
spot foreign exchange rates. Revenues and expenses are translated monthly at average exchange rates.
10 Leases
Operating lease payments are recognized as an expense in the profit and loss account on a straight-line basis over
the lease term.
11 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which
they are incurred.
12 Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current
investments. All other investments are classified as long-term investments.
a) Current investments are carried at lower of cost and fair value determined on an individual investment basis.
b) Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of the investments.
13 Employee Benefits
Short term compensated absence benefits (both vesting and non vesting) are accounted for on the basis of the actual
valuation of the leave entitlement as on the balance sheet date.
The actuarial valuations in respect of post employment defined benefit plans and long term employee benefits as at
the balance sheet date are measured using Projected Unit Credit Method.
59
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
I. Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the services are classified as short
term employee benefits. Benefits such as salaries, wages, expected cost of bonus and short term
compensated absences, etc. are recognized in the period in which the employee renders the related service.
II. Post-Employment Benefits:
a) Defined Contribution Plans:
The Company’s superannuation scheme, state governed provident fund scheme related to Dewas
factory and employee state insurance scheme are defined contribution plans. The contribution
paid/payable under the scheme is recognized during the period in which the employee renders the
related service.
b) Defined Benefit Plans:
The employees’ gratuity fund scheme, provident fund scheme managed by a Trust and pension
scheme are the Company’s defined benefit plans. The present value of the obligation under such
defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final obligation.
The obligation is measured at the present value of the estimated future cash flows. The discount rates
used for determining the present value of the obligation under defined benefit plans, is based on the
market yields on Government securities as at the balance sheet date, having maturity periods
approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Profit & Loss Account.
In case of funded plans, the fair value of the plan’s assets is reduced from the gross obligation under the
defined benefit plans, to recognize the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the
curtailment or settlement occurs. Past service cost is recognized as expenses on a straight-line basis
over the average period until the benefits become vested.
The Company pays contribution to a recognized provident fund trust in respect of all locations except
Dewas factory. The guidance note on implementing AS 15, Employees Benefits (Revised 2006) as
issued by the Institute of Chartered Accountants of India (ICAI) states that provident funds set up by
employer, which requires interest shortfall to be met by the employer, needs to be treated as a defined
benefit plan. In the absence of clear guidelines on the issue of Actuarial Valuation related to the interest
shortfall to be made good by the employer, the Company’s actuary has expressed their inability to
reliably measure the provident fund liability of the Company’s recognized provident fund. Accordingly,
the Company is unable to exhibit the related disclosures.
III. Long Term Employee Benefits:
The obligation for long term employee benefits such as long term compensated absences, and leave travel
compensations are recognized in the same manner as in the case of defined benefit plans as mentioned in
note II (b) above.
IV. Termination Benefits:
Where termination benefits such as compensation under voluntary retirement scheme is payable within a year
of the balance sheet date, the actual amount of termination benefits is accounted as expense in year of
accrual. Where termination benefits are payable beyond one year of the balance sheet date, the discounted
amount of termination benefits is amortised over a definite period.
60
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
14 Employee Stock Option Scheme
In respect of stock options granted pursuant to the Company’s Employee Stock Option Scheme, the intrinsic value of
the options (excess of market price of the share over the exercise price of the option) is treated as discount and
accounted as employee compensation cost over the vesting period.
15 Taxes on Income
a) Tax on income for the current period is determined on the basis of taxable income after considering the various
deductions available under the Income Tax Act, 1961.
b) Deferred tax is recognized on timing differences between the accounting income and the taxable income for
the year. The tax effect is calculated on the accumulated timing differences at the end of the accounting period
based on prevailing enacted or subsequently enacted regulations.
16 Segment Accounting
a) The accounting policies for individual segments are in line with accounting policies of the company.
b) Segment revenue from inter segment transactions is accounted on the basis of transfer price agreed between
the segments. Such transfer prices are determined with reference to the desired margins.
17 Accounting for interests in Joint Ventures
Type of Joint Venture
A. Jointly Controlled Operations
Company’s share of revenue, expenses, assets and liabilities are included in Revenues, Expenses, Assets
and Liabilities respectively.
B. Jointly Controlled Entities
Investment in such Joint ventures is carried at cost after providing for any permanent diminution in value, if
applicable. Income on investments in incorporated Jointly Controlled Entities is recognized when the right to
receive the same is established.
18 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that
an outflow of resources is expected to settle the obligation, in respect of which a reliable estimate can be made.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
1 Interest paid - others Rs.251,349,429/- (Rs.256,796,495/-) is net of Rs.23,369,940/- (Rs.27,020,156/-) being interest
received from customers and on deposits. [Tax deducted at source Rs.2,219,806/- (Rs.1,724,577/-)]
2 Net gain (loss) on foreign currency transactions on revenue accounts recognised in the Profit and Loss Account is
Rs. 61,235,183/- ( Rs.107,867,741/-).
B) OTHER NOTES
61
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
3 Estimated amount of contracts remaining to be executed on capital account and not provided for 90,553,004 189,734,603
4 Contingent liabilities not provided for in respect of :
a) Guarantees:
By the company to ICICI Bank Ltd. on behalf of
SPP Pumps Ltd. (GBP 3,500,000) 239,540,000 257,320,000
By the company to Barclays Bank Ltd. on behalf of
SPP Pumps Ltd. (GBP 4,000,000) 273,760,000 294,080,000
By the company to Citi Bank N A. on behalf of
SPP Pumps Ltd. (GBP 8,000,000) 547,520,000 588,160,000
By the company to Indian Overseas Bank Ltd. on behalf of
Kirloskar Constructions & Engineers Ltd., Chennai 800,000,000 800,000,000
By the company to Bank of Maharashtra on behalf of
Gondwana Engineers Limited 145,000,000 145,000,000
By the company to Citi Bank N.A. on behalf of
Kirloskar Brothers (Thailand) Ltd, (USD 500,000) 22,640,000 -
b) Central Excise (Matter Subjudice) 30,627,618 14,347,263
c) Sales Tax (Matter Subjudice) 89,009,579 89,056,373
d) Income Tax (Matter Subjudice) 522,425,350 395,323,477
e) Labour Matters (Matter Subjudice) 37,474,843 39,278,282
f) Other Legal Cases (Matter Subjudice) 585,161,252 18,792,301
g) Letters of Credit Outstanding 2,201,793,248 2,366,640,832
5 Construction Contracts:
a) Contract revenue recognised as revenue
for the year ended 31st March 2010 10,115,907,129 8,728,394,699
b) The aggregate amount of contract costs incurred
and recognised profits less recognised losses
upto 31st March 2010 41,769,847,836 31,790,631,155
c) Amount of advances received as on 31st March 2010
for contracts in progress 1,217,209,831 935,338,671
d) Amount of retentions as on 31st March 2010
for contracts in progress 583,743,163 297,368,580
6 Remuneration to Auditors
Statutory Auditors :
a) Audit Fees 2,000,000 1,500,000
b) Tax Audit Fees 150,000 150,000
c) Certification and other services 1,069,500 688,250
d) Expenses reimbursed 286,948 507,048
62
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
2010 2009
Rupees Rupees
7 Managerial Remuneration
Computation of Managerial Remuneration in accordance with
Section 198 of the Companies Act,1956
Profit as per Profit and Loss Account before provision for taxation 1,729,616,298 982,203,176
Add:
Managerial Remuneration 87,174,572 54,450,136
Directors' Remuneration 7,025,000 7,565,000
Directors' Fees 930,000 970,000
Provision for Doubtful Debts and Advances 81,704,587 70,609,776
1,906,450,457 1,115,798,088
Less :
Capital profit on sale of fixed assets 78,803 1,136,470
Profit on sale of investments 224,793,816 -
224,872,619 1,136,470
1,681,577,838 1,114,661,618
Commission to other Directors @ 1% 16,815,778 11,146,616
Restricted to 7,025,000 7,565,000
Details of Managerial Remuneration
a) Salary 21,731,587 17,767,200
b) Contribution to provident fund and superannuation fund 4,451,865 4,795,200
c) Commission 60,205,479 25,000,000
d) Perquisites 6,021,641 6,887,736
92,410,572 54,450,136
e) Estimated value of other benefits 169,053 116,817
TOTAL 92,579,625 54,566,953
8 Expenditure in foreign currencies
i) Interest 22,988,942 9,530,280
ii) Professional Fees 7,522,738 29,205,216
iii) Royalty 325,000 458,512
iv) Other Matters 363,876,226 346,633,215
9 Earnings in Foreign Currencies
i) F.O.B. Value of goods exported 1,547,153,826 2,165,886,317
ii) Services rendered/civil work 146,596,997 73,786,339
iii) Profit on sale of investment 224,793,816 -
iv) Others 1,857,776 241,292,690
10 C.I.F. Value of Imports
i) Raw materials, components & spare parts 4,998,590,361 1,883,493,356
ii) Capital goods 74,094,488 200,926,083
11 Expenditure incurred on Research and
Development activities undertaken during the year
Capital 7,199,442 16,707,375
Revenue 44,193,580 34,156,669
TOTAL 51,393,022 50,864,044
63
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
12 Earning per Share (Basic and diluted)
I - Basic
a) Profit for the year before tax 1,729,616,298 982,203,176
Less : Attributable tax thereto 554,438,774 311,916,578
Profit after tax 1,175,177,524 670,286,598
b) Total number of equity shares at the end of the year
used as denominator 79,333,266 105,764,355
c) Basic earning per share of nominal value of Rs 2/- each 14.81 6.34
II - Diluted
a) Profit for the year before tax 1,729,616,298 982,203,176
Less : Attributable tax thereto 554,438,774 311,916,578
1,175,177,524 670,286,598
b) Total number of equity shares at the end of the year 79,333,266 105,764,355
c) Add : Weighted average number of potential equity
shares on account of employee stock options 1,598 -
Weighted average number of shares outstanding
used as denominator 79,334,864 105,764,355
d) Diluted earning per share of nominal value of Rs 2/- each 14.81 6.34
13 Advances recoverable in cash or kind or for value to be received include :
a) Advance recoverable from Companies under same management
1) Kirloskar Systems Limited - 5,248,345
Maximum amount outstanding during the year - 5,248,345
2) Kirloskar Proprietary Limited - -
Maximum amount outstanding during the year - 3,547,000
3) Pressmatic Electro Stampings Pvt. Limited - 284,843
Maximum amount outstanding during the year - 732,519
4) Quadromatic Engineering Pvt. Limited - 348,765
Maximum amount outstanding during the year - 348,765
5) Kirloskar Brothers Investments Limited 8,149 -
Maximum amount outstanding during the year 1,308,598 -
6) Pooja Credits Private Limited (Upto 15/04/2009) - -
Maximum amount outstanding during the year 812,479 -
7) Kirloskar Silk Industries Limited (Upto 15/04/2009) 433,331 -
Maximum amount outstanding during the year 433,331 -
14 Amount of Borrowing Cost Capitalised during the year 8,076,888 29,203,312
15 Prior period expenditure (2,018,793) (13,818,902)
16 Employee Benefits :
i Defined Contribution Plans:Amount of Rs. 50,678,337/- (Rs. 43,120,522/-) is recognised as an expense and included in “Payments and Benefits to Employees” (Schedule 21) in the Profit and Loss Account.
64
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
ii Defined Benefit Plans
a) The amounts recognised in Balance Sheet are as follows :
Rupees
As at 31-03-2010 As at 31-03-2009
Particulars Gratuity Plan Pension Scheme Gratuity Plan Pension Scheme
(Funded) (Non Funded) (Funded) (Non Funded)
b) The amounts recognised in Profit and Loss Account are as follows :
Rupees
As at 31-03-2010 As at 31-03-2009
Particulars Gratuity Plan Pension Scheme Gratuity Plan Pension Scheme
(Funded) (Non Funded) (Funded) (Non Funded)
-
c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows:
Rupees
As at 31-03-2010 As at 31-03-2009
Particulars Gratuity Plan Pension Scheme Gratuity Plan Pension Scheme
(Funded) (Non Funded) (Funded) (Non Funded)
A. Amount to be recognised in Balance Sheet
Present Value of Defined Benefit Obligation 196,187,654 16,440,778 183,076,249 19,257,771
Less: Fair Value of Plan Assets 211,244,692 - 208,657,491 -
Amount to be recognised as liability or (asset) (15,057,038) 16,440,778 (25,581,242) 19,257,771
B. Amounts reflected in the Balance Sheet
Liabilities - - - 19,257,771
Assets (15,057,038) 16,440,778 (25,581,242) -
Net Liability/(Assets) (15,057,038) 16,440,778 (25,581,242) 19,257,771
1 Current Service Cost 14,711,308 - 12,455,848 -
2 Interest Cost 13,926,449 1,186,430 14,006,496 1,386,089
3 Expected Return on Plan Assets (17,945,527) - 35,022,607 -
4 Actuarial Losses/(Gains) (435,265) 1,993,423 (2,904,544) 2,949,432
5 Past Service Cost - - - -
6 Effect of any curtailment or settlement - - - -
7 Actuarial Gain not recognised in books - - - -
8 Adjustment for earlier years - - - -
Total included in Schedule 21
“Payment to Employees” 10,256,965 (806,993) (11,464,807) 4,335,521
Actual Return on Plan Assets 9.40% - 9.40%
1 Balance of the present value of
Defined benefit Obligation as at 01-04-2009 183,076,249 19,257,771 176,344,206 16,999,644
Less: transferred to
Kirloskar Corrocoat Pvt. Ltd. 2,169,558 - - -
Balance 180,906,691 19,257,771 176,344,206 16,999,644
2 Add: Current Service Cost 14,711,308 - 12,455,848 -
Add: Interest Cost 13,926,449 1,186,430 14,006,496 1,386,089
3 Add/(less): Actuarial losses / (gains) 295,105 1,993,423 (2,904,544) 2,949,432
4 Less: Benefits paid (13,651,899) 2,010,000 (16,825,757) (2,077,394)
5 Balance of the present value of
Defined Benefit Obligation as at 31-03-2010 196,187,654 16,440,778 183,076,249 19,257,771
65
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:
Rupees
Particulars Gratuity Plan (Funded)
31.03.2010 31.03.2009
e) The broad categories of plan assets as a percentage of total plan assets as at 31-03-2010 of Employee's Gratuity Scheme are as under :
Sr. No Description Percentage (%)
2010 2009
1 Opening balance of the fair value of the
plan assets as at 01-04-2009 208,657,491 190,460,641
Less: transferred to Kirloskar Corrocoat Pvt. Ltd. 2,436,798 -
206,220,693 190,460,641
2 Add: Expected return on plan assets 17,945,527 35,022,607
3 Add/(less) : Actuarial gains/(losses) 730,370 -
4 Add: Contribution by the employer - -
5 Less: Benefits paid 13,651,899 16,825,757
6 Closing balance of the plan assets as at 31-03-2010 211,244,691 208,657,491
1 Central Govt. Securities 56.00 56.09
2 State Govt. Securities 0.00 11.18
3 Approved Marketable Securities 0.00 2.96
4 Bonds/Debentures etc. 36.00 22.03
5 Loans 0.00 0.36
6 Equity 6.00 5.64
7 Liquid Fund/Money Market Instrument 2.00 1.72
8 Preference Shares 0.00 0.02
Grand Total 100 100
Basis used to determine the overall expected return:
Life Insurance Corporation (LIC) manages the investments of Employee Gratuity Scheme. Expected rate of return on investments is determined based on the assessment made by the LIC at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on the portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities.
f) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages)
1 Discount rate as at 31-03-2010 - 7.5%
2 Expected return on plan assets as at 31-03-2010 - 9%
3 Salary growth rate : For Gratuity Scheme - 10%
4 Attrition rate: For gratuity scheme - 19%
5 The estimates of future salary increases considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
66
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
17 Quantitative information in respect of Opening/Closing Stocks of goods manufactured :
Particulars Unit Opening Stock Closing Stock
Qty Value in Qty Value in
Rupees Rupees
Power Driven Pumps Nos. 11,432 87,856,670 * ^ 15,032 112,321,900
(13,505) (78,153,903) (11,432) (87,856,670)
Electric Motors Nos. 3,659 33,070,078 ** 1,767 14,849,819
(3,315) (20,938,698) (3,659) (33,070,078)
Valves Nos. 14 14 @ 13 13
(13) (13) (14) (14)
Spares and Others - 12,295,724 - 18,838,335
( - ) (25,798,432) ( - ) (12,295,724)
TOTAL 133,222,486 146,010,067
(124,891,046) (133,222,486)
Note : * Excludes 1731 ( 920 ) Nos. of Power Driven Pumps scrapped.
** Excludes 467 (207) Nos. of Motors scrapped.
@ Excludes 1 ( - ) Nos. of Valves scrapped.
Includes 26 Nos. received back from customers.
g) The amounts pertaining to defined benefit plans are as follows:
Particulars Gratuity Pension Scheme Gratuity Pension Scheme
Plan (Funded) (Non Funded) Plan (Funded) (Non Funded)
Defined Benefit Obligation 196,187,654 16,440,778 183,076,249 19,257,771
Plan Assets 211,244,692 - 208,657,491 -
Surplus/(Deficit) 15,057,038 (16,440,778) 25,581,242 (19,257,771)
h) General descriptions of defined plans:
1 Gratuity Plan:
The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.
2 Company’s Pension Plan:
The company operates a Pension Scheme for specified ex-employees wherein the beneficiaries are entitled to defined monthly pension.
Rupees
As at 31-03-2010 As at 31-03-2009
67
18 Quantitative information in respect of Opening/Closing Stocks of Trading Articles :
Particulars Unit Opening Stock Closing Stock
Qty Value in Qty Value in
Rupees Rupees
Pumps Nos. 5,895 15,595,331 * 12,960 23,956,791
(11,837) (23,824,798) (5,895) (15,595,331)
Valves Nos. 2,000 2,219,222 996 2,245,863
(1,638) (3,566,323) (2,000) (2,219,222)
Motors Nos. - 75,597 ** - -
(1) (21,189) - (75,597)
Alternators Nos. 248 5,803,347 186 4,040,045
(251) (4,948,520) (248) (5,803,347)
Others - 84,880,425 - 40,524,648
- (65,212,485) - (84,880,425)
TOTAL 108,573,922 70,767,347
(97,573,315) (108,573,922)
* Excludes Nil (356) No of Pumps scrapped & Excludes Nil (13) No. of pumps theft.
** Excludes Nil (1) no of Motor scrapped.
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
19 Quantitative information in respect of Sale of Manufactured Products :
Particulars 2009-10 Previous YearUnit * @ Value * @ Value
Qty. Rupees Qty. Rupees
Power Driven Pumps Nos. 279,414 9,837,013,829 207,180 7,699,508,855
Valves Nos. 28,892 708,060,359 26,653 1,007,789,944
Turbines Nos. 6 22,788,386 8 35,941,679
Electric Motors Nos. 24,123 282,811,330 23,221 250,685,614
Alloy Iron Castings
including Steel Castings M.T. 875 248,629,404 1,114 272,697,342
& Cast Iron Castings
Spare Parts and Others 1,190,089,261 1,309,794,500
Services and Job Order Receipts 437,351,738 607,686,869
Civil Receipts 2,380,606,172 1,860,242,937
TOTAL 15,107,350,479 13,044,347,740
* Includes 235 (389) Power driven pumps, 256 (304) Valves, included in Construction and project related revenue.
}
68
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
20 Quantitative information in respect of Purchases and Sales of Trading Articles :
Particulars Unit Purchases SalesValue * @ Value
Qty. Rupees Qty. Rupees
Pumps Nos. 267,414 1,065,056,317 260,349 607,571,078
(152,244) (291,181,300) (157,817) (389,096,046)
Valves Nos. 17,745 68,518,747 18,749 96,955,447
(24,178) (62,213,991) (23,816) (123,283,288)
Transformers Nos. 906 133,322,803 906 204,982,656
(1,173) (218,549,690) (1,173) (337,746,502)
Alternators Nos. 8,461 155,997,187 8,523 198,013,429
(6,334) (124,846,541) (6,337) (152,030,409)
Others - 3,813,693,283 - 4,225,908,571
- (4,068,680,560) - (4,723,847,435)
TOTAL 5,236,588,337 5,333,431,181
(4,765,472,082) (5,726,003,680)
* Includes 45 (20) Pumps, 489 (303) Valves, 896 (1109) Transformers included in Construction & Project Related Revenue
@ Includes Progress billing of Rs.10,378,318,715/- (Rs. 9,189,298,139/-) related to construction contracts accounted in the Profit and Loss account as Project related revenue of Rs.10,115,907,129/- (Rs. 8,728,394,699/-) in terms of Accounting Standard 7 on Construction Contracts.
21 Consumption of Raw Materials, Components and Spare Parts:
2009-10 Previous Year
Particulars Rupees Percentage Rupees Percentage
Imported 328,284,963 3.50 382,591,596 4.34
Indigenous 9,060,265,870 96.50 8,434,750,809 95.66
TOTAL 9,388,550,833 100.00 8,817,342,405 100.00
69
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
22 Details of Raw Materials Consumption :
2009-10 Previous Year
Particulars Unit Quantity Value in Rs. Quantity Value in Rs.
a) Pig Iron M.T. 5,978 103,394,850 5,254 140,555,056
b) Castings Nos. 666,561 237,829,750 691,848 270,470,423
c) Stator Stacks Nos. 230,861 278,969,939 121,566 219,939,021
d) Rotors Nos. 232,893 68,842,146 151,872 83,422,058
e) Motors Nos. 4,451 3,008,877,483 5,079 2,093,409,761
f) Engines Nos. 980 153,217,395 1,044 127,678,549
g) Motor Frames Nos. 18,019 116,314,417 22,475 105,384,649
h) Others - 5,421,104,853 - 5,776,482,888
TOTAL 9,388,550,833 8,817,342,405
70
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
23 Details of Licensed Capacity, Installed Capacity and Production of goods manufactured :
Sr. Class of Goods Unit Licensed capacity Installed capacity Production
No. 2009-10 Previous Previous PreviousYear Year Year
2009-10 2009-10
1. Power Driven Pumps Nos. 194,000 194,000 194,000 194,000 @ 284,801 206,107
2. Metal Cutting including
Grinding Machines “ 736 736 736 736 - -
3. Reduction Gear Units “ 1,200 1,200 1,200 1,200 - -
4. Valves “ 70,070 70,070 70,070 70,070 28,892 26,654
5. Ploughs “ 3,216 3,216 3,216 3,216
6. Alloy Iron Castings * * * *
including Steel Castings M.T. 120 120 120 120
7. Cast Iron Castings M.T. 2,500 2,500 2,500 2,500
8. Cast Iron Castings 875 1,114
including Alloy M.T. 5,000 5,000 5,000 5,000
Steel castings for
Automotive purposes
9. Turbines Nos. 6 8
10 Electric Motors Nos. @@ 22,709 23,784
@ Includes 56 (80) for own use.
@@ Includes 11 ( 12 ) for own use.
* Per annum on single shift basis.
Notes :
a) Licensed Capacity includes registered capacities for activities existing prior to the Industries (Development
Regulation) Act, 1951, but does not include licenses held for captive capacities.
b) It is not practicable to indicate precisely installed capacity of each type of product manufactured by the Company, as
the capacity of various facilities available is overlapping for each product. Besides, the Company manufactures a very
large range amongst the licensed products which, in turn, is decided by actual demand from time to time. Also the
Company buys components, parts and other services from outside. The installed capacities as indicated above are
estimates as certified by the Managing Director and accepted by the Auditors.
c) In terms of notification no. 477E dt. 25-7-91 issued by Department of Industrial Development, industrial licenses are
not required for the products manufactured by the Company except centrifugal pumps manufactured at Dewas below
10 cm x 10 cm which are reserved for small scale sector. Revalidation of industrial license in this range of pumps is
under process.
}
71
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
24. Related Party Disclosures
(A) Names of the related party and nature of relationship where control exists
Name of the related party Nature of relationship Effective Date
1 Better Value Holdings Pvt. Ltd. Holding company up to 19.09.2009
2 Pooja Credits Pvt. Ltd. Subsidiary company up to 15.04.2009
3 Kirloskar Silk Industries Ltd. Subsidiary company up to 15.04.2009
4 Kirloskar Constructions and Engineers Ltd Subsidiary Company
5 Gondwana Engineers Ltd Subsidiary Company
6 The Kolhapur Steel Ltd. Subsidiary Company
7 Hematic Motors Private Ltd. Subsidiary Company from 12.11.2009
8 Vakasa Electricals Private Ltd. Subsidiary Company of
Hematic Motors Pvt. Ltd
9 Moreshwar Electricals Private Ltd. Subsidiary Company of
Hematic Motors Pvt. Ltd
10 Ila Electricals Private Ltd. Subsidiary Company of
Hematic Motors Pvt. Ltd
11 Quadromatic Engineering Private Ltd. Subsidiary Company from 12.11.2009
12 Pressmatic Electro Stampings Private Ltd. Subsidiary Company from 12.11.2009
13 Kirloskar Corrocoat Private Ltd. Subsidiary Company from 12.11.2009
14 Kirloskar Brothers International B V Subsidiary Company
15 Kirloskar Brothers Europe B.V. Subsidiary of
Kirloskar Brothers International BV
16 Kirloskar Brothers (Thailand)) Ltd. Subsidiary Company
17 SPP Pumps Ltd. Subsidiary of
Kirloskar Brothers International BV
18 SPP Pumps France EURL Subsidiary of SPP Pumps Ltd.
19 Certified Engines Ltd Subsidiary of SPP Pumps Ltd.
20 SPP (South Africa) (Pty) Ltd. Subsidiary of SPP Pumps Ltd.
21 SPP Pumps Holdings LLC Subsidiary of SPP Pumps Ltd.
22 SPP Pumps Management LLC Subsidiary of SPP Pumps Ltd.
23 SPP Pumps LP Subsidiary of SPP Pumps Ltd.
24 SPP France S A S Subsidiary of SPP Pumps Ltd.
25 Kirloskar Industries Ltd
formerly known as Kirloskar Oil Engines Limited Fellow Subsidiary Company up to 15.04.2009
26 Kirloskar Pneumatic Company Limited Fellow Subsidiary Company up to 15.04.2009
27 Kirloskar Systems Limited Fellow Subsidiary Company up to 19.09.2009
28 Kirloskar Proprietary Limited Fellow Subsidiary Company up to 19.09.2009
72
In Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties ** Major parties **
1 Purchase of goods & services
Subsidiary/Fellow subsidiary companies 1,215,598,074 991,284,120
Kirloskar Constructions and Engineers Limited 438,676,841 238,615,483
Gondwana Engineers Limited 229,174,076 155,496,941
The Kolhapur Steel Limited 182,878,718 129,635,690
Hematic Motors Private Limited 316,948,479 193,844,417
* Kirloskar Industires Limited - 238,831,488
Enterprises over which key managementpersonnel or their relatives exercise significant influence 1,437,360 -
Joint Ventures 37,654,547 70,669,193
TOTAL 1,254,689,981 1,061,953,313
2 Sale of goods/contract revenue & services
Subsidiary/Fellow subsidiary companies 366,204,303 302,293,811
SPP Pumps Limited 260,631,549 292,075,754
Kirloskar Brothers Europe B. V. 84,539,496 302,628
Joint Ventures 1,850,466 1,227,601
TOTAL 368,054,769 303,521,412
3 Rendering Services
Subsidiary/Fellow subsidiary companies 13,239,698 19,441,708
SPP Pumps Limited 6,482,481 12,407,267
Kirloskar Corrocoat Private Limited 5,843,527 -
Kirloskar Proprietary Limited - 3,500,000
Joint Ventures 13,038,943 11,769,810
Kirloskar Corrocoat Private Limited 7,659,612 11,769,810
Kirloskar Ebara Pumps Limited 5,379,331 -
TOTAL 26,278,641 31,211,518
4 Receiving Services
Subsidiary/Fellow subsidiary companies 15,429,386 11,431,679
Kirloskar Brothers Europe B. V. 13,690,994 5,582,167
Hematic Motors Private Limited 691,672 3,869,596
Kirloskar Systems Limited 880,050 1,664,040
Enterprises over which key managementpersonnel or their relatives exercise significant influence 769,950 -
Joint Ventures 392,000 -
Key Management Personnel 600,000 450,000
Relatives of Key Management Personnel 2,500,000 2,610,000
Mrs. Pratima Kirloskar 1,250,000 900,000
TOTAL 19,691,336 14,491,679
Sr. Nature of transaction/relationship/major partiesNo.
73
* (Formerly known as Kirloskar Oil Engines Limited)
(B) Disclosure of related parties transactions
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
In Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties ** Major parties **
5 Sale of Fixed Assets
Subsidiary/Fellow subsidiary companies 169,846 -
Kirloskar Corrocoat Private Limited 169,846 -
TOTAL 169,846 -
6 Purchase of Shares
Key Management Personnel 562,031,505 -
Mr. Sanjay Kirloskar 562,031,505 -
TOTAL 562,031,505 -
7 Sale of Shares
Subsidiary/Fellow subsidiary companies 374,020,780 -
SPP Pumps Limited 374,020,780 -
TOTAL 374,020,780 -
8 Investment made
Subsidiary/Fellow subsidiary companies 1,052,535,299 97,053,263
Kirloskar Brothers International B. V. 375,421,780 -
Hematic Motors Private Limited 206,337,059 -
Pressmatic Electro Stampings Private Limited 261,891,143 -
The Kolhapur Steel Limited - 93,843,590
TOTAL 1,052,535,299 97,053,263
9 Royalty Paid
Subsidiary/Fellow subsidiary companies 12,402,510 47,137,925
Kirloskar Proprietary Limited 12,402,510 47,137,925
Enterprises over which key managementpersonnel or their relatives exercise significant influence 39,253,992 -
Kirloskar Proprietary Limited 39,253,992 -
TOTAL 51,656,502 47,137,925
10 Dividend paid
Holding Company 106,414,684 211,625,340
Better Value Holdings Private Limited 106,414,684 211,625,340
Subsidiary/Fellow subsidiary companies 210,000 630,000
Enterprises over which key managementpersonnel or their relatives exercise significant influence 105,000 -
Key Management Personnel 2,612,608 5,217,216
Relatives of Key Management Personnel 124,200 256,400
TOTAL 109,466,492 217,728,956
Sr. Nature of transaction/relationship/major partiesNo.
74
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
In Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties ** Major parties **
11 Dividend received
Subsidiary/Fellow subsidiary companies 56,041,600 127,029,847
Hematic Motors Private Limited 9,854,600 1,047,200
Kirloskar Corrocoat Private Limited 32,500,000 -
* Kirloskar Industries Limited - 73,903,270
Kirloskar Pneumatic Company Limited - 31,830,778
Pooja Credits Private Limited - 15,160,099
Joint Ventures 22,000,000 18,050,000
Kirloskar Ebara Pumps Limited 15,750,000 13,050,000
Kirloskar Corrocoat Private Limited 6,250,000 5,000,000
TOTAL 78,041,600 145,079,847
12 Interest Received
Subsidiary/Fellow subsidiary companies 7,518,957 8,204,440
Gondwana Engineers Limited 1,599,670 1,773,116
The Kolhapur Steel Limited 5,919,287 6,431,324
TOTAL 7,518,957 8,204,440
13 Interest Paid
Subsidiary/Fellow subsidiary companies 2,060,274 2,854,795
Hematic Motors Private Limited 2,060,274 2,793,151
TOTAL 2,060,274 2,854,795
14 Remuneration Paid
Key Management Personnel 92,410,572 54,450,136
Mr. Sanjay Kirloskar 34,644,382 17,447,835
Mr. Vikram Kirloskar 34,646,404 19,346,117
Mr. R. K. Srivastava 11,348,259 8,950,788
Mr. J. R. Sapre 11,771,527 8,705,397
Relatives of Key Management Personnel 1,600,766 530,000
TOTAL 94,011,338 54,980,136
15 Security Deposit Paid
Key Management Personnel - 1,700,000
Mr. Sanjay Kirloskar - 1,700,000
Relatives of Key Management Personnel 1,700,000 3,400,000
Mrs. Pratima Kirloskar 1,700,000 1,700,000
Mr. Sanjay Kirloskar (HUF) - 1,700,000
TOTAL 1,700,000 5,100,000
Sr. Nature of transaction/relationship/major partiesNo.
75
* (Formerly known as Kirloskar Oil Engines Limited)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
In Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties ** Major parties **
16 Repayment of Inter Corporate Deposit
Subsidiary/Fellow subsidiary companies 40,000,000 20,000,000
Pressmatic Electro Stampings Private Limited - 20,000,000
Hematic Motors Private Limited 40,000,000 -
TOTAL 40,000,000 20,000,000
17 Receipt of Inter Corporate Deposit
Subsidiary/Fellow subsidiary companies - 10,000,000
Pressmatic Electro Stampings Private Limited - 10,000,000
TOTAL - 10,000,000
18 Loan Given
Subsidiary/Fellow subsidiary companies 332,528,798 630,790,392
Kirloskar Constructions and Engineers Limited 291,828,798 505,550,000
Gondwana Engineers Limited 40,700,000 3,300,000
The Kolhapur Steel Limited - 121,940,392
TOTAL 332,528,798 630,790,392
19 Payment received towards repayment of Loan
Subsidiary/Fellow subsidiary companies 297,096,936 8,800,000
Kirloskar Constructions and Engineers Limited 256,096,936 -
Gondwana Engineers Limited 20,000,000 5,800,000
The Kolhapur Steel Limited 21,000,000 3,000,000
TOTAL 297,096,936 8,800,000
20 Royalty Received
Subsidiary/Fellow subsidiary companies - 1,334,443
* Kirloskar Industries Limited - 1,334,443
TOTAL - 1,334,443
21 Reimbursement of Expenses
Subsidiary/Fellow subsidiary companies 5,401,057 23,281,680
SPP Pumps Limited 2,967,476 6,179,259
Kirloskar Constructions and Engineers Limited 1,267,759 8,536,095
Gondwana Engineers Limited 994,277 24,164
* Kirloskar Industries Limited - 6,725,953
Joint Ventures 19,005 5,548,635
Kirloskar Corrocoat Private Limited 19,005 5,548,635
TOTAL 5,420,062 28,830,315
Sr. Nature of transaction/relationship/major partiesNo.
76
* (Formerly known as Kirloskar Oil Engines Limited)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
In Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties ** Major parties **
1 Accounts receivable
Subsidiary/Fellow subsidiary companies 936,624,479 760,386,522
Kirloskar Constructions and Engineers Limited 644,496,442 538,342,927
SPP Pumps Limited 80,350,283 106,519,618
The Kolhapur Steel Limited 85,262,003 105,156,122
Joint Ventures 1,294,328 -
Key Management Personnel 1,700,000 1,700,000
Relatives of Key Management Personnel 3,400,000 3,400,000
TOTAL 943,018,807 765,486,522
2 Amount Due
Subsidiary/Fellow subsidiary companies (101,606,711) (155,413,467)
* Kirloskar Industries Limited - (30,534,679)
Hematic Motors Private Limited (99,463,156) (97,012,450)
Joint Ventures - (3,543,242)
Enterprises over which key managementpersonnel or their relatives exercise significant influence (13,863,128) -
Kirloskar Proprietary Limited (13,863,128) -
Key Management Personnel (60,205,479) (25,000,000)
Mr. Sanjay Kirloskar (25,000,000) (7,500,000)
Mr. Vikram Kirloskar (20,205,479) (7,500,000)
TOTAL (175,675,318) (183,956,709)
22 Security Deposit Refund
Key Management Personnel 1,700,000 -
Mr. Sanjay Kirloskar - 1,700,000
TOTAL 1,700,000 -
(C) Amount due to/from related parties In Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties** Major parties**
Sr. Nature of transaction/relationship/major partiesNo.
Sr. Nature of transaction/relationship/major partiesNo.
77
** “Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction
* (Formerly known as Kirloskar Oil Engines Limited)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
(D) Names of Related Parties with whom transactions have been entered into:
1) Holding Company Better Value Holdings Pvt.Ltd. up to 19.09.2009
2) Subsidiary Companies Pooja Credits Pvt. Ltd. up to 15.04.2009
Kirloskar Silk Industries Ltd. up to 15.04.2009
Kirloskar Constructions and Engineers Ltd.
Gondwana Engineers Ltd.
The Kolhapur Steel Limited
Hematic Motors Pvt. Ltd. from 12.11.2009
Vakasa Electricals Pvt. Ltd.
Moreshwar Electricals Pvt. Ltd.
Ila Electicals Pvt. Ltd.
Pressmatic Electro Stampings Pvt. Ltd. from 12.11.2009
Quadromatic Engineering Pvt. Ltd. from 12.11.2009
Kirloskar Corrocoat Pvt. Ltd. from 12.11.2009
SPP Pumps Ltd.
Certified Engines Ltd.
SPP (South Africa) (Pty) Ltd.
SPP Pumps LP
SPP Pumps Management LLC
SPP Pumps Holdings LLC
SPP Pumps France EURL
SPP France S A S
Kirloskar Brothers International B V
Kirloskar Brothers Europe B.V.
Kirloskar Brothers (Thailand) Ltd.
3) Fellow Subsidiary Companies Kirloskar Proprietary Ltd (up to 19.09.2009)
Kirloskar Systems Ltd. (up to 19.09.2009)
4) Joint Ventures Kirloskar Ebara Pumps Ltd.
Kirloskar Corrocoat Pvt. Ltd. Up to 11.11.2009
5) Key Management Personnel Mr. Sanjay Kirloskar
Mr.Vikram Kirloskar up to 20.01.2010
Mr.R.K.Srivastava
Mr.J R Sapre
6) Relatives of Key Management Mrs.Pratima Kirloskar Wife of Mr. S. C. Kirloskar
Personnel Mr.Alok Kirloskar Son of Mr. S. C. Kirloskar
Ms.Rama Kirloskar Daughter of Mr. S. C. Kirloskar
Mrs.Suman Kirloskar Mother of Mr. S. C. Kirloskar
Mr.Atul Kirloskar Brother of Mr. S. C. Kirloskar
Mr.Rahul Kirloskar Brother of Mr. S. C. Kirloskar
Mrs.Geetanjali Kirloskar Wife of Mr. Vikram Kirloskar
up to 20.01.2010
78
Mrs.Mrinalini Kirloskar Mother of Mr. Vikram Kirloskar
up to 20.01.2010
Mrs.Vijayalaxmi Srivastava Wife of Mr. R K Srivastava
Mrs Asha J Sapre Wife of Mr. J R Sapre
Ms. Preeti Sapre Daughter of Mr. J R Sapre
7) Jointly controlled operations HCC – KBL Joint Venture
KBL – MCCL Joint Venture
KCCPL – IHP – BRC – TAIPPL – KBL JV
IVRCL – KBL JV
Maytas – KBL JV
Larsen & Toubro – KBL JV
KBL-MEIL-KCCPL JV
KBL – PLR JV
KBL – Koya – VA Tech JV
KBL – PIL Consortium
Larsen & Toubro – KBL – Maytas JV
IVRCL – KBL – MEIL JV
Pioneer – Avantica – ZVS – KBL JV
AMR – Maytas – KBL – WEG JV
Indu – Shrinivasa Constructions – KBL – WEG JV
MEIL – KBL – IVRCL JV
MEIL – Maytas – KBL JV
KCCPL – TAIPPL – KBL JV
KBL-SPML JV
8) Enterprises over which
key management personnel or
their relatives exercise significant
influence Kirloskar Systems Ltd.
Quadrant Communications Ltd.
Kirloskar Proprietary Ltd
79
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
No. 31.03.2010 31.03.2009 31.03.2010 31.03.2009
ii) No interest charged:
Sr. Name of the Company Balance as at Maximum outstanding
No. 31.03.2010 31.03.2009 31.03.2010 31.03.2009
Sr. Name of the Company Balance as at Maximum outstanding
1 Kirloskar Silk Industries Ltd. - 406,404 406,404 406,404
2 Kirloskar Constructions & Engineers Ltd. 586,281,862 505,550,000 800,946,591 505,550,000
3 Gondwana Engineers Ltd. 33,700,000 13,000,000 52,700,000 15,500,000
4 The Kolhapur Steel Ltd. 97,940,392 118,940,392 118,940,392 121,940,392
1 Kirloskar Silk Industries Ltd. - 406,404 406,404 406,404
2 Kirloskar Constructions & Engineers Ltd. 586,281,862 505,550,000 800,946,591 505,550,000
3 The Kolhapur Steel Ltd. 57,500,000 57,500,000 57,500,000 57,500,000
C Loans and advances in the nature of loans to firms/Companies in which directors are interested : NIL
D Investment by the loanee (borrower) in the shares of the Company or subsidiary of the Company : NIL
Note: Loans to employees including directors under various schemes of the company (such as housing loan, furniture loan, education loan etc.) have been considered to be outside the purview of this disclosure requirements.
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
(E) Disclosure pursuant to clause 32 of the listing agreement regarding loans and advances to subsidiary and associate companies:
Loans and advances in the nature of loans: Rupees
Sr. Name of the Company Balance as at Maximum outstanding
No. 31.03.2010 31.03.2009 31.03.2010 31.03.2009
A To Subsidiary Companies
1 Kirloskar Silk Industries Ltd. - 406,404 406,404 406,404
(Subsidiary till 15.04.2009)
2 Kirloskar Constructions & Engineers Ltd. 586,281,862 505,550,000 800,946,591 505,550,000
3 Gondwana Engineers Ltd. 33,700,000 13,000,000 52,700,000 15,500,000
4 The Kolhapur Steel Limited 97,940,392 118,940,392 118,940,392 121,940,392
5 Pooja Credits Pvt. Ltd. - - - -
(Subsidiary till 15.04.2009)
6 SPP Pumps Ltd. (its subsidiaries) - - - -
(Subsidiary till 15.02.2010)
7 Kirloskar Brothers International BV (its subsidiaries)
8 Kirloskar Brothers (Thailand ) Ltd. - - - -
9 Hematic Motors Pvt Ltd. (its subsidiaries) - - - -
(Subsidiary from 12.11.2009)
10 Pressmatic Electro Stampings Pvt. Ltd. - - - -
(Subsidiary from 12.11.2009)
11 Quadromatic Engineering Pvt. Ltd. - - - -
(Subsidiary from 12.11.2009)
12 Kirloskar Corrocoat Pvt. Ltd - - - -
(Subsidiary from 12.11.2009)
TOTAL 717,922,254 637,896,796
B Loans and advances in the nature of loan where there is,
i) No repayment schedule: Rupees
80
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
25. Particulars related to Joint Ventures :
a) List of Joint Ventures
Sr. No. Name of the Joint Venture Description Ownership Country of Interest Incorporation
1 Kirloskar Ebara Pumps Ltd. Jointly controlled entity 45% India
2 Kirloskar Corrocoat Pvt. Ltd. (up to 11.11.2009) Jointly controlled entity 50% India
3 HCC – KBL Joint Venture Jointly controlled operations N A India
4 KBL – MCCL Joint Venture Jointly controlled operations N A India
5 KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly controlled operations N A India
6 IVRCL – KBL JV Jointly controlled operations N A India
7 Maytas – KBL JV Jointly controlled operations N A India
8 Larsen & Toubro – KBL JV Jointly controlled operations N A India
9 KBL-MEIL-KCCPL JV Jointly controlled operations N A India
10 KBL – PLR JV Jointly controlled operations N A India
11 KBL – Koya – VA Tech JV Jointly controlled operations N A India
12 KBL – PIL Consortium Jointly controlled operations N A India
13 Larsen & Toubro – KBL – Maytas JV Jointly controlled operations N A India
14 IVRCL – KBL – MEIL JV Jointly controlled operations N A India
15 Pioneer – Avantica – ZVS – KBL JV Jointly controlled operations N A India
16 AMR – Maytas – KBL – WEG JV Jointly controlled operations N A India
17 Indu – Shrinivasa Constructions – KBL – WEG JV Jointly controlled operations N A India
18 MEIL – KBL – IVRCL JV Jointly controlled operations N A India
19 MEIL – Maytas – KBL JV Jointly controlled operations N A India
20 KCCPL – TAIPPL – KBL JV Jointly controlled operations N A India
21 KBL-SPML JV Jointly controlled operations N A India
81
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
b) Financial Interest in Jointly controlled entities
Sr. Name of the Joint Venture Company's No. share in
As at 31st March, 2010 As at 31st March, 2009
1 Kirloskar Ebara Pumps Ltd. Assets 490,124,387 385,701,714
Liabilities 487,874,387 383,451,714
For the year ended For the year ended
31st March, 2010 31st March, 2009
Income 577,306,009 577,083,045
Expenses 411,136,096 410,641,304
As at 31st March, 2010 As at 31st March, 2009
2 Kirloskar Corrocoat Private Ltd. Assets N A 88,852,334
Liabilities N A 63,852,334
For the year ended For the year ended
31st March, 2010 31st March, 2009
Income N A 151,320,186
Expenses N A 112,525,508
Kirloskar Corrocoat Private Ltd. has become a subsidiary company of Kirloskar Brothers Ltd. with effect from
November 12, 2009.
c) Contingent liabilities , if any , incurred in relation to interest in Joint Ventures N I L
d) Capital commitments , if any , in relation to interest in Joint Ventures N I L
26. a) Details of Derivative Instruments (for hedging)
Particulars Amount in Foreign Currency Equivalent amount in Indian Rupees
Loans 19,747,260 USD 944,977,227
(Nil) (Nil)
334,339,000 JPY 163,876,261
(Nil) (Nil)
Rupees
82
b) Details of foreign currency exposures that are not hedged by a derivative instrument or otherwise:
Particulars Amount in Foreign Currency Equivalent amount in Indian Rupees
Liability
Sundry Creditors 197,158,773 JPY 95,976,891
(4,027,985) (2,094,552)
4,212,013 EUR 256,258,874
(2,039,013) (138,754,845)
2,900 GBP 198,476
(18,148) (1,334,288)
7,921,157 USD 358,669,981
(15,514,415) (793,717,492)
204,316 EGP 1,736,277
(-) (-)
Loans 19,695,969 USD 891,833,471
(4,500,000) (230,220,000)
882,201,481 JPY 429,455,681
(-) (-)
Advances received from Customers 3,947,065 EUR 240,139,447
(1,363,369) (92,777,285)
42,611 GBP 2,916,311
(34,718) (2,552,496)
2,471,211 USD 111,896,424
(5,580,638) (285,505,446)
16,878,120 EGP 143,430,268
(-) (-)
Assets
Advances to Suppliers 2,821,627 EUR 168,987,240
(2,778,196) (186,083,573)
21,615 GBP 1,467,433
(540,873) (39,213,293)
1,814,665 USD 81,460,306
(3,750,249) (190,212,626)
80,000 JPY 38,312
(92,243,078) (47,043,969)
9,692,440 EGP 82,366,357
(-) (-)
Sundry Debtors 2,316,641 EUR 138,743,629
(2,547,164) (170,609,018)
500,679 GBP 33,991,124
(732,591) (53,112,872)
7,613,323 USD 341,762,064
(6,185,707) (313,739,075)
3,845,696 EGP 32,680,721
(-) (-)
232,787 SGD 7,404,967
(-) (-)
Bank Accounts 1,115,325 EUR 66,796,828
(998) (66,862)
3,189,583 USD 143,180,372
(1,634,325) (8,334,555)
6,837,866 EGP 58,108,184
(-) (-)
648,714 GBP 44,041,198
(-) (-)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
83
28. Stock Option Scheme
a) The grant of options to the employees under the Stock Option Scheme is on the basis of their performance and other eligibility criteria. The Options are vested over a period of three years subject to the discretion of the Management and fulfilment of certain conditions.
b) The maximum term of ESOP is three years from the vesting date. The ESOP will be settled in the form of Equity Shares.
c) The details of the grants under the Stock Option Scheme are summarised below.
I) Details of Stock Options scheme granted in previous year :
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
Sr. No. Particulars 2009-10 2008-09
Grant I Grant II Grant I Grant II
1) Exercise Price - Rs. 200/- 200/- 200/- 200/-
2) Grant Date 31/8/2007 19/1/2008 31/8/2007 19/1/2008
3) Vesting Commences on 31/8/2008 19/1/2009 31/8/2008 19/1/2009
4) Options granted and outstanding at the beginning of the year 448,415 22,300 486,700 27,750
5) Options granted during the year - - - -
6) Options cancelled/ lapsed during the year 156,560 7,985 38,285 5,450
7) Options exercised during the year 10,000 - - -
8) Option outstanding at the end of year 281,855 14,315 448,415 22,300
9) Options granted and outstanding at the end of the year of which
a. Options Vested 120,795 6,135 135,715 6,690
b. Options yet to Vest 161,060 8,180 312,700 15,610
27. Details of provisions and movements in each class of provisions.
Particulars As at 31st March,2010 (Rs.)
Warranty
Carrying amount at the beginning of the year 31,856,656
(28,257,896)
Additional provision made during the year 43,387,708 (31,856,656)
Amount used during the year 31,856,656
(28,257,896)
Unused amounts reversed during the year -
(-)
Carrying amount at the end of the year 43,387,708
(31,856,656)
Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits:-
Product Warranty
Accruals have been made in respect of warranties given by the Company for the sales made and services rendered during the year based on past experience.
84
II) The details of the grants under the Stock Option Scheme during the year are summarised below :
1) Exercise Price - Rs. 2/- 2/- 2/-
2) Grant Date 01/06/2009 06/10/2009 22/10/2009
3) Vesting Commences on 01/06/2010 06/10/2010 22/10/2010
4) Options granted and outstanding at the beginning of the year - - -
5) Options granted during the year 750 750 750
6) Options lapsed during the year - - -
7) Options exercised during the year - - -
8) Option outstanding at the end of year 750 750 750
9) Options granted and outstanding at the end of the year of which
a. Options Vested - - -
b. Options yet to Vest 750 750 750
Sr. No. Particulars 2009-10
Grant I Grant II Grant III
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
29. Following investments are purchased and sold during the year :
Particulars No. of Units Face Value Cost PriceRs. Rs.
ICICI Prudential Liquid - Super Institutional Plan - Daily Dividend 9,997,800 10.00 100,000,000
Birla Sun Life Cash Plus - Institutional Premium Plan - Daily Dividend 9,980,538 10.02 100,000,000
Kotak Liquid - Institutional Premium Plan - Daily Dividend 8,177,885 12.23 100,000,000
HDFC Cash Management Fund - Savings Plan - Daily Dividend 9,401,677 10.64 100,000,000
Templeton India Treasury Management Account - Super IP - Daily Dividend 99,933 1,000.67 100,000,000
JPMorgan India Liquid Fund - Super Institutional - Daily Dividend 9,992,106 10.01 100,000,000
IDFC Cash Fund - Plan C - Super Institutional Plan - Daily Dividend 9,997,501 10.00 100,000,000
HDFC Cash Management Fund - Treasury Advantage - Wholesale - Daily Dividend 9,969,536 10.03 100,009,402
Templeton India Ultra Short Bond Fund - Super Institutional - Dividend 9,989,344 10.01 100,009,321
ICICI Prudential Flexible Income Plan - Premium - Daily Dividend 9,458,636 10.57 100,010,890
JPMorgan India Treasury Fund - Super Institutional - Daily Dividend 9,991,844 10.01 100,007,370
Kotak Floater - Long Term - Daily Dividend 9,921,757 10.08 100,009,323
Birla Sun Life Savings Fund - Institutional - Daily Dividend 9,994,132 10.01 100,009,282
IDFC Money Manager - Treasury Plan - Plan C - Daily Dividend 9,999,388 10.00 100,008,882
IDFC Money Manager - Investment Plan - Plan B - Daily Dividend 4,992,511 10.02 50,000,000
Templeton India Ultra Short Bond Fund - Super Institutional - Dividend 4,994,207 10.01 50,000,000
LIC MF Liquid Fund - Daily Dividend 4,553,693 10.98 50,000,000
LIC MF Income Plus Fund - Daily Dividend 5,000,497 10.00 50,004,968
85
30. As per the information available with the Company till date; none of the suppliers have informed the Company about their having registered themselves under the “Micro, Small and Medium Enterprises Development Act, 2006”. As such, information as required under this Act, cannot be compiled with and therefore, not disclosed for the year.
31. A Scheme of Arrangement between Kirloskar Brothers Limited (Company), Kirloskar Brothers Investments Limited (KBIL) and their respective shareholders, was duly approved by all the requisite regulatory authorities including Honourable High Court of Judicature at Bombay.
The Company has complied with the conditions stipulated in the High Court order and effective date of the scheme is March 2, 2010. The appointed date of Scheme of Arrangement is April 16, 2009. As contemplated in the scheme, certain specified investments, as listed in the Scheme of Arrangement, held by the Company stand transferred to and vested in KBIL without any further acts, deeds and actions.
The subscribed and paid-up equity share capital of the Company which was Rs. 211,528,710/- consisting of 105,764,355 equity shares of Rs. 2/- each stands reduced to Rs. 158,646,532/- consisting of 79,323,266 equity shares of Rs. 2/- each. This excludes further subscribed and Paid-up equity share capital of Rs. 20,000/- consisting of 10,000 equity shares of Rs. 2/- each, issued and allotted under the Company’s Employees’ Stock Option Scheme during the year. These 10,000 shares are kept in abeyance for want of specific Bombay High Court orders for giving effect to terms of scheme with regard to capital reduction in the Company.
Pursuant to the scheme, the carrying cost of investments transferred and the amount of the reduction in the share capital of the Company has been charged / credited to the General Reserve. The Company has also written off the amount of the original investment made during the current year in KBIL. Pursuant to the scheme, every shareholder in the Company has been issued specified shares in KBIL.
32. On September 19, 2009, Bettervalue Holdings Private Limited (BVHPL) has sold all the shares held of Kirloskar Brothers Limited, through inter se transfer amongst the group, to other promoters. As a result, BVHPL has ceased to be the holding company of Kirloskar Brothers Limited.
33. On November 12, 2009, Kirloskar Brothers Limited has acquired additional shares of the following companies and has become the holding company of these companies:
• Kirloskar Corrocoat Pvt. Ltd.
• Hematic Motors Pvt. Ltd.
• Pressmatic Electro Stampings Pvt. Ltd.
• Quadromatic Engineering Pvt. Ltd.
Prior to the above acquisition of additional shares, Kirloskar Corrocoat Pvt Ltd was only a joint venture company and the other companies were fellow subsidiary companies.
34. On February 15, 2010, Kirloskar Brothers Limited (KBL) has sold the shares held in its Wholly Owned Subsidiary - SPP Pumps Ltd (SPP) to its Wholly Owned Subsidiary based in the Netherlands, namely Kirloskar Brothers International B.V (KBI). KBI has issued 1000 shares of Euro 100 each to KBL at a premium, towards the consideration for transfer of SPP shares to them by KBL.
35. The figures have been regrouped / rearranged wherever necessary. Figures in bracket relate to previous year.
86
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE(Inserted by Notification No. GSR 388 (E), dated 15.05.1995)
I Registration DetailsRegistration No. : 0 0 0 6 7 0 State Code 1 1
Balance Sheet Date 3 1 0 3 2 0 1 0
Date Month YearII Capital raised during the year ( Amount in Rs. Thousands )
Public Issue Rights Issue
Bonus Issue Private Placement
ESOPs
III Position of Mobilisation and Deployment of Funds ( Amount in Rs. Thousands )Total Liabilities Total Assets
Sources of FundsPaid up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Employee Stock Options outstanding Deferred Taxes
Application of FundsNet Fixed Assets Investments
Net Current Assets Misc. Expenses
Accumulated Losses Intangible Assets
IV Performance of Company ( Amount in Rs. Thousands )Turnover Total Expenses
V Profit of Company ( Amount Rs. Thousands )
+ - Profit / Loss Before Tax + - Profit / Loss After Tax
+
(Please tick appropriate box + for Profit, - for Loss )Basic Earning per Share in Rs. Dividend Rate %
VI Generic Names of Three Principal Products / Services of Company(As per monetary terms)
Item Code No. (ITC Code) :
Product Description :
Item Code No. (ITC Code) :
Product Description :
Item Code No. (ITC Code) :
Product Description :
-- --
-- --
1 0 7 8 5 6 7 3 1 0 7 8 5 6 7 3
1 5 8 6 6 7
7 7 4 2 8 7 2 7 9 8 0 9 9
6 9 9 4 1 7 9 5 2 5
2 9 2 6 7 0 8 1 9 0 2 9 8 9
5 9 4 2 0 6 2 --
--
2 0 6 5 7 8 4 2 1 8 9 2 8 9 2 6
1 1 7 5 1 7 8
1 4 . 8 1 2 7 5
P U M P S F O R L I Q U I D S
V A L V E S
8 4 . 1 3
8 4 . 8 1
6 9 0 5 1 5 4
+
C O N S T R U C T I O N & P R O J E C T
N - A
R E L A T E D A C T I V I T Y
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 26, 2010 PUNE : April 26, 2010
87
2 0
1 3 9 1 4
1 7 2 9 6 1 6
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956RELATING TO SUBSIDIARY COMPANIES :
Names of the Kirloskar SPP Pumps Gondwana Kirloskar Brothers The KolhapurSubsidiaries Constructions & Limited Engineers Limited International B V Steel Limited
Engineers Limited (Consolidated) (Consolidated)
1. The Financial year of the Subsidiary Companies ended on March 31, 2010 December 31, 2009 March 31, 2010 December 31, 2009 March 31, 2010
2. Holding Company’s interest Controls Controls Controls Controls Controls composition of the composition of the composition of the composition of the composition of the
Board and also Board and also Board and also Board and also Board and alsoowns 100 % of owns 100 % of owns 100 % of owns 100 % of owns 95.95 % of
equity share capital equity share capital equity share capital equity share capital equity share capital 3. Net aggregate amount of
Subsidiary’s Profits / (Losses) as far as it concerns members of the holding company not dealt with the Holding Company’s accounts :
(i) Profit / (Loss) for the Subsidiary’s financial year end Rs. (19,758,085) 111,657,165 29,882,850 (4,516,281) 18,479,385
(ii) Profits / (Losses) for its previous
financial years since becoming subsidiary. Rs. (140,034,992) 393,013,074 31,916,778 (13,402,801) 10,642,752
4. Net aggregate amount of
Subsidiary’s Profits / (Losses) dealt with in the Holding Company’s accounts :
(i) for the Subsidiary’s financial year ended March 31, 2010 Nil Nil Nil * Nil Nil
(ii) for its previous financial years Nil Nil Nil ** Nil Nil
* - except dividend Rs. 6,024,000 -
** - except dividend Rs. 4,417,600 -
88
89
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956RELATING TO SUBSIDIARY COMPANIES (CONTD) :
Names of the Kirloskar Hematic Motors Pressmatic Quadromatic KirloskarSubsidiaries Brothers Pvt. Ltd. Electo Stampings Engineering Corrocoat Pvt. Ltd.
(Thailand) Ltd. (Consolidated) Pvt. Ltd. Pvt. Ltd.
1. The Financial year of the Subsidiary Companies ended on September 30, 2009 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010
2. Holding Company’s interest Controls Controls Controls Controls Controls composition of the composition of the composition of the composition of the composition of the
Board and also Board and also Board and also Board and also Board and alsoowns 100 % of owns 100 % of owns 100 % of owns 90.63 % of owns 65 % of
equity share capital equity share capital equity share capital equity share capital equity share capital 3. Net aggregate amount of
Subsidiary’s Profits / (Losses) as far as it concerns members of the holding company not dealt with the Holding Company’s accounts :
(i) Profit / (Loss) for the Subsidiary’s financial year end Rs. (7,981,033) 11,971,513 8,008,073 1,450,229 21,748,720
(ii) Profits / (Losses) for its previous
financial years since becoming subsidiary. Rs. (570,108) - - - -
4. Net aggregate amount of
Subsidiary’s Profits / (Losses) dealt with in the Holding Company’s accounts :
(i) for the Subsidiary’s financial year ended March 31, 2010 Nil Nil* Nil * Nil * Nil *
(ii) for its previous financial years Nil Nil Nil Nil Nil
* - except dividend Rs. 8,807,400 5,842,500 904,000 32,500,000
For and on behalf of the Board of Directors
SANJAY KIRLOSKAR S. N. INAMDAR Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE
Company Secretary Vice President (Finance)
PUNE : April 26, 2010
The C
om
pany
has
obta
ined a
ppro
val of
the C
entr
al G
ove
rnm
ent
under
sect
ion 2
12(8
) of
the C
om
panie
s A
ct,
19
56
(A
ct),
fo
r n
ot
att
ach
ing
do
cum
en
ts o
f its
su
bsi
dia
rie
s re
ferr
ed to
in S
ect
ion 2
12 (1) (a
) to
(d) of t
he A
ct to
the A
nnual A
ccounts
of t
he C
om
pany.
As
per th
e s
aid
appro
val,
the
Co
mp
an
y is
giv
ing
the
follo
win
g in
form
atio
n in
re
spe
ct o
f its
subsi
dia
ries
for th
e fi
nanci
al y
ear ended S
epte
mber 30, 2
009 /
Dece
mber 31, 2
009 /
Marc
h 3
1, 2
010 a
nd fo
r th
e c
orr
esp
on
din
g p
revi
ou
s ye
ar e
nd
ed
Se
pte
mb
er 3
0, 2
00
8 /
Dece
mber 3
1, 2
008 /
Marc
h 3
1, 2
009..
P
arti
cula
rsP
oo
ja C
red
its
Pvt
. Ltd
.K
irlo
skar
Silk
Ind
ust
ries
Ltd
.K
irlo
skar
Co
nst
ruct
ion
s G
on
dw
ana
En
gin
eers
Lim
ited
Th
e K
olh
apu
r S
teel
Ltd
.&
En
gin
eers
Ltd
.
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
31, 2
010
31, 2
009
31, 2
010
31, 2
009
31, 2
010
31, 2
009
31, 2
010
31, 2
009
31, 2
010
31, 2
009
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Bal
ance
-sh
eet
Sh
are
Cap
ital
-
34,
454,
770
-
20,
001,
300
161
,500
,020
6
1,50
0,02
0 4
,016
,000
4
,016
,000
1
7,00
0,00
0 1
7,00
0,00
0
Res
erve
s &
Su
rplu
s -
1
00,0
28,2
05
-
-
155
,799
,820
1
4,92
4,41
9 1
11,6
80,4
87
88,
852,
512
24,
634,
173
26,
247,
000
Min
ori
ty In
tere
st -
-
-
- -
Ass
ets
Fix
ed A
sset
s -
-
-
1
8,42
9,62
4 6
91,0
05,6
65
578
,755
,523
8
,756
,568
8
,020
,554
8
0,79
7,59
9 7
5,26
7,02
9
Inta
ngib
le A
sset
s -
- 1
,824
,420
4
,649
,657
-
1,05
0,09
9 6
81,6
36
Inve
stm
ents
-
133
,351
,187
-
-
5
,100
5
,100
9
9,91
0 9
9,91
0 -
-
(see
not
e 1
for
deta
ils)
Cur
rent
Ass
ets,
-
1
,184
,215
-
1
60,0
69
1,3
64,1
15,9
70
1,3
32,0
20,8
33
333
,383
,094
2
51,7
04,3
91
162
,525
,345
1
78,8
30,0
30
Def
erre
d Ta
x -
-
-
-
-
-
-
Mis
cella
neou
s E
xpen
ditu
re
Tota
l Ass
ets
-
134
,535
,402
-
1
8,58
9,69
3 2
,056
,951
,155
1
,915
,431
,113
3
42,2
39,5
72
259
,824
,855
2
44,3
73,0
43
254
,778
,695
Lia
bili
ties
Sec
ured
Loa
ns -
-
-
-
5
24,8
70,5
96
487
,370
,808
5
9,38
4,51
9 6
1,70
8,48
5 3
,269
,761
20
,387
,683
Uns
ecur
ed L
oans
-
-
-
406
,404
5
86,2
81,8
62
550
,550
,000
3
3,70
0,00
0 1
3,00
0,00
0 1
06,7
05,7
55
126
,134
,107
Cur
rent
Lia
bilit
ies
and
Pro
visi
ons
-
52,
427
-
1,0
09,5
35
617
,388
,168
7
84,2
89,3
31
133
,115
,747
9
1,93
3,97
6 9
2,84
8,43
7 6
9,50
6,52
0
Def
erre
d Ta
x -
-
-
-
3
4,19
4,98
9 1
6,79
6,53
5 3
42,8
19
313
,882
(
85,0
83)
(4,
496,
615)
Tota
l Lia
bili
ties
-
52,
427
-
1,4
15,9
39
1,7
62,7
35,6
15
1,8
39,0
06,6
74
226
,543
,085
1
66,9
56,3
43
202
,738
,870
2
11,5
31,6
95
Bal
ance
of
Pro
fit
&
Lo
ss A
cco
un
t -
-
-
(
2,82
7,54
6) (
23,0
84,3
00)
-
-
-
-
-
Pro
fit
& L
oss
Acc
ou
nt
Turn
over
-
18,
266,
340
-
-
1,0
12,2
28,3
27
1,2
21,9
68,1
50
692
,711
,988
6
26,1
17,9
21
337
,999
,359
2
11,9
86,9
19
Pro
fit b
efor
e ta
xatio
n -
1
8,01
2,16
2 -
(
10,4
32)
(2,
334,
631)
(10
9,12
9,34
4) 4
5,51
2,67
2 3
6,06
3,66
8 3
3,00
8,86
7 6
,020
,829
Pro
visi
on fo
r ta
xatio
n -
-
-
-
1
7,42
3,45
4 8
,526
,740
1
5,62
9,82
2 1
2,48
1,28
1 1
4,52
9,48
2 (
4,62
1,92
3)
Pro
fit a
fter
taxa
tion
-
18,
012,
162
-
(10
,432
) (
19,7
58,0
85)
(11
7,65
6,08
4) 2
9,88
2,85
0 2
3,58
2,38
7 1
8,47
9,38
5 1
0,64
2,75
2
Inte
rim D
ivid
end
-
15,
160,
099
-
-
-
-
-
-
-
-
Pro
pose
d D
ivid
end
-
-
-
-
-
-
6,0
24,0
00
4,0
16,0
0017
,000
,000
-
Not
e 1
:
Det
ails
of
Inve
stm
ents
5765
0 E
quity
Sha
res
of R
s. 1
0/-
each
of
Kirl
oska
r In
vest
men
ts &
Fin
ance
Ltd
. -
1
,153
,000
17,0
02,0
90 e
quity
sha
res
of R
s.2/
- ea
ch in
Kirl
oska
r In
dust
ries
Ltd.
(For
mer
ly K
irlos
kar
Oil
Eng
ines
Ltd
.) -
5
8,18
8,06
7
3,80
0,00
0 eq
uity
sha
res
of R
s. 5
/- e
ach
in
Kirl
oska
r F
erro
us In
dust
ries
Ltd.
-
69,
100,
000
445,
500
equi
ty s
hare
s of
Rs.
10/
- ea
ch in
Kirl
oska
r C
onsu
ltant
s Lt
d. -
4
,455
,000
90
P
arti
cula
rsP
oo
ja C
red
its
Pvt
. Ltd
.K
irlo
skar
Silk
Ind
ust
ries
Ltd
.K
irlo
skar
Co
nst
ruct
ion
s G
on
dw
ana
En
gin
eers
Ltd
.T
he
Ko
lhap
ur
Ste
el L
td.
& E
ng
inee
rs L
td.
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
31, 2
010
31, 2
009
31, 2
010
31, 2
009
31, 2
010
31, 2
009
31, 2
010
31, 2
009
31, 2
010
31, 2
009
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
4,20
7 eq
uity
sha
res
of R
s. 1
00/-
eac
h in
Hem
atic
Mot
ors
Pvt
. Ltd
. -
3
,179
,699
3,36
0 eq
uity
sha
res
of R
s. 1
00/-
eac
h in
Pre
ssm
atic
Ele
ctro
Sta
mpi
ngs
Pvt
. Ltd
. -
1
,116
,998
16,3
75 e
quity
sha
res
of R
s. 1
0/-
each
in
Qua
drom
atic
Eng
inee
ring
Pvt
. Ltd
. -
7
06,0
39
34,3
00 e
quity
sha
res
of R
s. 1
0/-
each
in
Qua
dran
t Com
mun
icat
ions
Ltd
. -
3
43,0
00
200
equi
ty s
hare
s of
Rs.
10/
- ea
ch in
Ban
k of
Indi
a -
9
,000
1 E
quity
Sha
re o
f Kirl
oska
r P
ropr
ieta
ry L
td.
5,
100
5,1
00
Sai
nath
Sug
ar C
o-op
. Fac
tory
10 s
hare
s of
Rs.
1000
/- e
ach
-
-
1
0,00
0 1
0,00
0
Nat
iona
l Sav
ings
Cer
tific
ate
-
-
2
3,00
0 2
3,00
0
800
Equ
ity S
hare
s of
Rs.
10/
- of
Osw
al A
gro
Ran
jeet
Wea
ving
Mill
-
-
31,
200
31,
200
64 E
quity
Sha
res
of R
s. 1
0/-
each
of
Mon
sant
o C
hem
ical
Ltd
. -
-
9,0
40
9,0
40
100
Equ
ity S
hare
s of
Rs.
10/
- ea
ch o
f
Ste
rling
Tea
Ltd
. -
-
2
6,67
0 2
6,67
0
Sub
Tot
al -
1
38,2
50,8
03
-
-
5,1
00
5,1
00
99,
910
99,
910
-
-
Less
: Pro
visi
on fo
r D
eclin
e in
valu
e of
Inve
stm
ents
-
4,8
99,6
16
-
-
-
-
-
-
-
-
-
133
,351
,187
-
-
5
,100
5
,100
9
9,91
0 9
9,91
0 -
-
91
92
P
arti
cula
rsK
irlo
skar
Bro
ther
sK
irlo
skar
Bro
ther
sS
PP
Pu
mp
s L
imit
edH
emat
ic
Pre
ssm
atic
Qu
adro
mat
ic K
irlo
skar
(
Th
aila
nd
) L
td.
Inte
rnat
ion
al B
V(C
on
solid
ated
M
oto
rs P
vt. L
td.
Ele
cto
Sta
mp
ing
sE
ng
inee
rin
gC
orr
oco
at
(C
on
solid
ated
Fin
anci
al S
tate
men
ts)
Fin
anci
al s
tate
men
ts)
(C
on
solid
ated
P
vt. L
td.
Pvt
. Ltd
.P
vt. L
td.
Fin
anci
al s
tate
men
ts)
As
at S
ept.
As
at S
ept.
A
s at
Dec
.A
s at
Dec
.A
s at
Dec
. A
s at
Dec
. A
s at
Mar
chA
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
30, 2
009
30, 2
008
31, 2
009
31, 2
008
31, 2
009
31, 2
008
31, 2
010
31, 2
010
31, 2
010
31, 2
010
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Bal
ance
-sh
eet
Sh
are
Cap
ital
13,9
78,0
00
3,7
02,7
50
9,6
94,3
20
9,6
47,3
58
132
,343
,575
1
48,3
15,8
00
2,9
35,8
00
2,3
37,0
00
1,0
00,0
00
50,
000,
000
Res
erve
s &
Su
rplu
s 1
43,3
39
2,
048,
423
52
6,19
9,76
4 4
36,6
87,5
44
190
,008
,946
1
81,6
55,6
84
25,
830,
790
58,
937,
567
Min
ori
ty In
tere
st -
(
913,
326)
674
,130
-
-
-
-
Ass
ets
Fix
ed A
sset
s1,
101,
905
72,
534
1,7
45,1
25
33
6,33
8,90
4 2
87,5
89,6
75
28,
668,
638
127
,875
,299
1
2,30
7,00
8 8
8,35
1,95
4
Inta
ngib
le A
sset
s -
-
656,
050
863
,907
1
6,32
2 -
Inve
stm
ents
-
-
-
-
350
,279
1
5,00
1 9
,000
-
(see
not
e 1
for
deta
ils)
Cur
rent
Ass
ets,
5
,612
,061
3
,115
,104
3
5,69
7,33
4 1
7,29
2,95
9 1
,772
,703
,131
2
,101
,533
,141
3
14,3
73,7
15
409
,279
,772
2
4,65
2,42
4 1
49,8
92,7
28
Def
erre
d Ta
x -
-
1,
437,
550
8,6
43,1
77
-
-
-
-
Mis
cella
neou
s E
xpen
ditu
re
1,87
6,52
6
Tota
l Ass
ets
6,71
3,96
6 3
,187
,638
3
7,44
2,45
9 1
7,29
2,95
9 2
,110
,479
,585
2
,397
,765
,993
3
44,0
48,6
82
538
,033
,979
3
6,98
4,75
4 2
40,1
21,2
08
Lia
bili
ties
Sec
ured
Loa
ns -
-
102,
050,
996
167
,976
,023
2
6,37
6,45
0 4
2,00
3,84
2 2
,296
,184
1
2,49
2,14
3
Uns
ecur
ed L
oans
-
-
-
-
136
,859
,163
-
-
Cur
rent
Lia
bilit
ies
and
Pro
visi
ons
1,29
4,04
8 9
9,05
1 3
9,86
3,52
9 1
6,25
6,00
5 1
,349
,885
,250
1
,644
,786
,626
1
24,0
24,6
01
180
,694
,793
8
,387
,222
1
14,3
52,1
34
Def
erre
d Ta
x -
-
-
-
702
,885
(
5,51
6,50
3) (
529,
442)
4,3
39,3
64
Tota
l Lia
bili
ties
1,29
4,04
8 99
,051
3
9,86
3,52
9 1
6,25
6,00
5 1
,451
,936
,246
1
,812
,762
,649
1
51,1
03,9
36
354
,041
,295
1
0,15
3,96
4 1
31,1
83,6
41
Bal
ance
of
Pro
fit
& L
oss
Acc
ou
nt
(8,7
01,4
21)
(61
4,16
3) (
13,2
50,4
87)
(9,
284,
535)
-
-
-
-
-
-
Pro
fit
& L
oss
Acc
ou
nt
Turn
over
-
-
83,
654,
166
8,9
13,0
59
3,9
74,9
71,3
90
4,2
65,1
63,6
19
191
,669
,093
3
27,8
66,3
57
19,
831,
662
145
,080
,388
Pro
fit b
efor
e ta
xatio
n (
7,98
1,03
3) (
564,
596)
(4,
516,
281)
(12
,960
,721
) 2
01,0
08,9
39
228
,402
,396
1
8,38
1,18
3 1
2,28
9,71
0 2
,103
,503
3
7,39
6,57
9
Pro
visi
on fo
r ta
xatio
n -
5
,512
-
-
8
9,35
1,77
4 6
3,57
7,24
4 6
,409
,670
4
,281
,637
6
53,2
74
15,
647,
859
Pro
fit a
fter
taxa
tion
(7,9
81,0
33)
(57
0,10
8) (
4,51
6,28
1) (
12,9
60,7
21)
111
,657
,165
1
64,8
25,1
52
11,
971,
513
8,0
08,0
73
1,4
50,2
29
21,
748,
720
Inte
rim D
ivid
end
- -
-
-
-
-
-
-
-
-
Pro
pose
d D
ivid
end
- -
-
-
-
-
8
,807
,400
5
,842
,500
1
,000
,000
5
0,00
0,00
0
105,
000
Equ
ity S
hare
s of
Rs.
2/-
each
fully
pai
d of
Kirl
oska
r B
roth
ers
Ltd.
50,0
00
225
Equ
ity S
hare
s of
Rs.
10/-
eac
h
fully
pai
d of
Kirl
oska
r P
neum
atic
Co.
Ltd
.
27,0
00
500
Equ
ity S
hare
s of
Rs.
6/-
each
fully
pai
d of
Alfr
ed H
erbe
rt (
Indi
a) L
td.
9,11
0
7,28
6 E
quity
Sha
res
of R
s.10
/- e
ach
fully
pai
d of
Kirl
oska
r E
lect
ric C
o. L
td.
163,
918
45,0
00 E
quity
Sha
res
of R
s.10
/- e
ach
fully
pai
d of
Kirl
oska
r In
vest
men
t & F
inan
ce L
td.
63
0,00
0
10,0
00 E
quity
Sha
res
of R
s.10
/- e
ach
fully
pai
d of
Kirl
oska
r F
erro
us In
d. L
td.
10
0,00
0
5 S
hare
s of
Rs.
50
each
fully
pai
d of
Kris
hnak
unj C
o-op
. Hsg
. Soc
. Ltd
.25
0
93
Par
ticu
lars
Kir
losk
ar B
roth
ers
Kir
losk
ar B
roth
ers
SP
P P
um
ps
Lim
ited
Hem
atic
P
ress
mat
icQ
uad
rom
atic
Kir
losk
ar
(T
hai
lan
d)
Ltd
. In
tern
atio
nal
B V
(Co
nso
lidat
ed
Mo
tors
Pvt
. Ltd
.E
lect
o S
tam
pin
gs
En
gin
eeri
ng
Co
rro
coat
(Co
nso
lidat
ed F
inan
cial
Sta
tem
ents
)F
inan
cial
sta
tem
ents
) (
Co
nso
lidat
ed
Pvt
. Ltd
. P
vt. L
td.
Pvt
. Ltd
. F
inan
cial
sta
tem
ents
)
As
at S
ept.
As
at S
ept.
A
s at
Dec
.A
s at
Dec
.A
s at
Dec
. A
s at
Dec
. A
s at
Mar
chA
s at
Mar
ch
As
at M
arch
A
s at
Mar
ch
30, 2
009
30, 2
008
31, 2
009
31, 2
008
31, 2
009
31, 2
008
31, 2
010
31, 2
010
31, 2
010
31, 2
010
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
Rup
ees
125
Equ
ity S
hare
s of
Rs.
10/-
eac
h
fully
pai
d of
Kirl
oska
r P
neum
atic
Co.
Ltd
.15
,000
2000
Equ
ity S
hare
s of
Rs.
10/-
eac
h
fully
pai
d of
Gov
indj
i Trik
amda
s E
xpor
ts20
,000
75 E
quity
Sha
res
of R
s.10
/- e
ach
fully
pai
d of
Kirl
oska
r P
neum
atic
Co.
Ltd
.9,
000
Sub
Tot
al -
-
-
-
-
-
9
80,2
78
35,
000
9,00
0 -
Less
: Pro
visi
on fo
r D
eclin
e in
valu
e of
Inve
stm
ents
- -
-
-
-
-
6
29,9
99
19,
999
-
- -
-
-
-
-
3
50,2
79
15,
001
9,00
0 -
Exc
han
ge
Rat
e co
nsi
der
ed f
or
1.
398
1.4
81
60.
59
68.
91
67.
87
74.
16
con
vers
ion
NOTES
94
CONSOLIDATED FINANCIAL STATEMENTS
95
CONSOLIDATED FINANCIAL STATEMENTS
Auditors' Report to the Board of Directors of Kirloskar Brothers Limited
stWe have audited the attached consolidated balance sheet of Kirloskar Brothers Limited (KBL) Group, as at 31 March 2010 and also the consolidated profit and loss account and the consolidated cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the generally accepted auditing standards in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets stof Rs. 4,759.32 million as at 31 March, 2010, the total revenue of Rs. 6,554.23 million and cash outflows
amounting to Rs. 281.93 million for the year then ended. These Financial statements and other financial information have been audited by other auditors, whose report have been furnished to us and our opinion is based solely on the reports of other auditors. Our opinion in case of the unaudited financial statements of Kirloskar Brothers International B.V. Consolidated, has been based solely on the report of the management,
stwhose financial statements reflect total assets of Rs. 37.44 million as at 31 March, 2010, the total revenue Rs. 111.76 million and cash inflow amounting to Rs. 2.03 million for the year then ended. We have been informed that these financial statements are not subjected to an audit under any law.
We report that the consolidated financial statements have been prepared by the management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, Accounting Standard (AS) 23, Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27, Financial Reporting of Interests in Joint Ventures, prescribed by Companies (Accounting Standards) Rules, 2006.
We further report that the statutory auditors of Kirloskar Constructions and Engineers Limited, subsidiary of KBL, have opined that the accounts read with the notes thereon give a true and fair view subject to the following qualifications in the auditor's report:
i) They are unable to comment on compliance of Accounting Standard 2 on 'Valuation of Inventories' issued under Companies (Accounting Standards) Rules, 2006 and have relied on the certification by the management. No provision has been made in respect of non-moving, obsolete and unusable inventories. Discrepancies between physical inventories and inventories as per records have not been dealt with in the accounts.
ii) Non- compliance of Accounting Standard 5 'Net profit or loss for the period, prior period items and changes in accounting policies' issued under Companies (Accounting Standards) Rules, 2006 in so far as it relates to the prior period items.
iii) Provision for gratuity and leave encashment has not been made in case of site employees and the disclosures as per Accounting Standard 15 'Employee Benefits' issued under Companies (Accounting Standards) Rules, 2006.
iv) The processes and internal controls in the areas of operations as well as accounting are inadequate and need to be instituted/strengthened.
v) Sundry Debtors, claims receivable, advances to suppliers, other loans and advances, 23 bank balances in case of sites, sundry creditors, statutory dues and other current liabilities are subject to confirmations and reconciliation. Provision required for amounts not recoverable has not been assessed. Claims
96
receivable in respect of extra work done and price escalations in respect to projects are subject to acceptance by the respective customers.
vi) No provision has been made for income tax liability in respect of the years for which assessments have been completed by the concerned income tax authorities.
The Director's report of the company gives detailed comments on the observations made by the auditors. Taking into consideration the relative size of the consolidated financial statements of KBL Group, in our opinion the impact on the Consolidated financial statements of KBL Group, of the abovementioned qualifications are not expected to be material, although the overall impact of the auditor's qualification on the financial statements have not been ascertained by them.
Based on our audit and on consideration of report of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
a) in the case of the consolidated balance sheet, of the state of affairs of KBL Group as at 31st March, 2010;
b) in the case of consolidated profit and loss account, of the profit for the year ended on that date;
c) in the case of the consolidated cash flow statement, of the cash flows for the year ended on that date.
For M/s P. G. BHAGWATChartered Accountants
Pankaja BhagwatPartner
Membership No. 86155Registration No. of Firm : 101118W
Pune : April 26, 2010
97
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2010Schedule 2010 2009
Rupees RupeesSOURCES OF FUNDS :Shareholders’ FundsCapital 1 158,509,032 211,528,710 Reserves and surplus 2 7,646,150,537 7,808,157,639 Employee Stock options outstandings 76,990,608 121,855,582 Less: Deferred employee compensation expenses 7,049,214 29,787,458
69,941,394 92,068,124 7,874,600,963 8,111,754,473
Minority InterestCapital 23,132,327 9,909,588 Reserves and surplus 19,297,802 6,034,842
42,430,129 15,944,430 Loan FundsSecured Loans 3 1,570,243,858 2,570,528,602 Unsecured Loans 4 2,949,867,049 1,411,094,590
4,520,110,907 3,981,623,192 Deferred Tax-net 5 121,725,983 78,924,501
Total 12,558,867,982 12,188,246,596 APPLICATION OF FUNDS :Fixed Assets 6Gross Block 6,451,861,184 4,996,671,173 Less: Depreciation and Impairment 2,252,022,853 1,787,578,999 Net Block 4,199,838,331 3,209,092,174 Capital work-in-progress including capital advances 291,539,756 713,776,203
4,491,378,087 3,922,868,377 Intangible Assets 7 Gross Block 119,914,099 101,403,688 Less: Amortization 99,036,382 83,890,175 Net Block 20,877,717 17,513,513 Assets under implementation including capital advances. - 681,636
20,877,717 18,195,149 Goodwill 647,931,989 469,641,079 Investments
a) Long Term Investments 12,000,181 2,767,284,707 b) Current Investments 100,424,508 9,000 112,424,689 2,767,293,707
Current Assets, Loans & AdvancesInventories 8 2,827,860,384 2,361,302,709 Gross amount due from customers for project related contract work 9 2,744,898,192 2,342,221,967 Sundry debtors 10 8,118,534,712 8,122,931,600 Cash and bank balances 11 1,197,235,482 531,989,334 Other current assets 12 1,407,965,552 861,641,635 Loans and advances 13 3,650,099,117 2,915,692,581
19,946,593,439 17,135,779,826 Less: Current Liabilities & Provisions
Current Liabilities 14 11,034,539,741 10,577,476,524 Gross amount due to customers for project related contract work 15 733,052,337 722,722,763 Provisions 16 894,622,387 826,426,604
12,662,214,465 12,126,625,891 Net Current Assets 7,284,378,974 5,009,153,935 Miscellaneous Expenditure (To the extent not written off or adjusted)Preliminary Expenses 1,876,526 1,094,349
Total 12,558,867,982 12,188,246,596
Notes to Accounts 24The schedules referred to above and the notes to accounts form an integral part of the Balance Sheet
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance) PUNE : April 26, 2010 PUNE : April 26, 2010
98
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule 2010 2009Rupees Rupees
INCOME
Sales 17 26,589,205,796 24,526,732,915
Other income 18 289,635,697 425,735,691
Total 26,878,841,493 24,952,468,606
EXPENDITURE
Materials consumed 19 18,288,909,185 17,748,090,313
Payments and benefits to employees 20 2,099,492,758 2,136,871,555
Operating and other expenses 21 3,735,683,321 3,065,673,103
Interest 22 454,818,027 410,687,696
Depreciation, amortization and impairment 383,879,365 300,541,016
24,962,782,656 23,661,863,683
Less: Expenses capitalized 2,057,060 4,927,376
Total 24,960,725,596 23,656,936,307
Profit/(Loss) before tax 1,918,115,897 1,295,532,299
Provision for tax 23 785,952,604 462,843,210
Profit/(Loss) after tax before prior year adjustments 1,132,163,293 832,689,089
Prior year Adjustments 3,459,946 22,503
Profit/(Loss) after tax after prior year adjustments 1,128,703,347 832,666,586
Less : Minority Share 7,044,458 (1,577,791)
Add : Share in Profit of the Associate Companies 6,044,374 18,450,351
Balance brought forward from previous year 504,311,757 433,076,040
Profit available for appropriation 1,632,015,020 1,285,770,768
Appropriations
Proposed dividend 486,665,213 233,528,710
Additional tax on dividend 80,980,317 42,947,185
Transfer to General Reserve 428,127,535 486,532,765
Transferred to retained earnings of Associate Companies 6,044,374 18,450,351
Surplus carried to Balance Sheet 630,197,581 504,311,757
1,632,015,020 1,285,770,768
Basic Earnings per Equity Share ( Refer Note No.8 ) 14.23 8.06
Diluted Earnings per Equity Share ( Refer Note No.8 ) 14.23 8.06
Notes to Accounts 24
The schedules referred to above and the notes to accounts form an integral part of Profit and Loss Account.
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance) PUNE : April 26, 2010 PUNE : April 26, 2010
99
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
2010 2009Rupees Rupees
A. Cash flow from operating activitiesNet profit before taxation and extraordinary items 1,918,115,897 1,295,532,299 Adjustments for Depreciation and amortization 383,886,295 300,541,016
Transfer from Capital Reserve - (8,536,041) Employees Stock Option debited/(credited) to Profit & Loss A/c (Net) (19,518,730) 48,033,482 Loss/(profit) on sale of fixed assets (507,307) (289,133) (Profit)/loss on sale of investments 123,534 (102,841) Unrealized foreign exchange loss/(gain) (162,199,809) 34,994,020 Provision for doubtful debts and advances 81,915,222 88,295,586 Provision for diminution in value of investments 49,482 25,399 Provision for gratuity and leave encashment (3,942,146) -
Interest income (41,517,206) (107,478,221) Dividend income (33,007,256) (147,025,574) Investment written off 500,000 - Excess provision written back (2,054,005) (3,857,905) Prior period expenditure (3,459,946) (22,503)
Sundry irrecoverable balances written off 262,967 222,843 Interest expenses 454,366,148 410,687,696
Operating profits before working capital changes 2,573,013,140 1,911,020,123 (Increase)/decrease in trade and other receivables (990,835,251) (3,355,486,948)(Increase)/decrease in inventories (388,789,166) (432,393,375)Increase/(decrease) in sundry creditors (94,993,240) 2,601,134,517 Cash generated from operations 1,098,395,483 724,274,317 Income tax paid (1,052,240,805) (444,358,176)Net cash from operating activities 46,154,678 279,916,141
B. Cash flow from investing activitiesPurchase of fixed assets (636,413,578) (1,265,449,743)Proceeds from sale of fixed assets 2,896,868 5,965,932 (Purchase)/Sale of investments 1,188,293,581 92,905,551 Interest received 79,554,256 107,337,545 Dividends received 33,374,841 147,427,174 Advance to subsidiaries (37,474,035) (115,374,375)Net cash from investing activities 630,231,933 (1,027,187,916)
C. Cash flow from financing activitiesProceeds from issuance of Share Capital 113,695,290 6,201,873 Proceeds from issuance of Share Capital from Joint Venturer - 5,512,776 Purchase of own shares (8,354,612) - (Repayment)/proceeds of/from long term borrowings (net) 1,747,636,935 715,113,173 (Repayment)/proceed of/from other borrowings (net) (1,220,167,745) 609,712,633 Interest paid (425,063,477) (404,835,778)Dividends paid (229,949,007) (433,303,422)Tax on dividend paid (40,370,725) (77,610,919)Net cash used in financing activities (62,573,341) 420,790,336 Unrealised Exchange Gain / (Loss) in cash and cash equivalents (14,331,025) - Net increase in cash and cash equivalents 613,813,270 (326,481,439)Cash and cash equivalents at the beginning of the year 531,989,334 856,296,765 Add : Due to acquisition of subsidiary 65,763,903 2,174,008 Sub Total 597,753,237 858,470,773 Cash and cash equivalents at the end of the year 1,197,235,482 531,989,334
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance) PUNE : April 26, 2010 PUNE : April 26, 2010
100
SCHEDULE TO THE CONSOLIDATED ACCOUNTS
2010 2009Rupees Rupees
SCHEDULE 1 : SHARE CAPITAL *
Authorized
250,000,000 (250,000,000) equity shares of Rs.2/- (Rs.2/-) each 500,000,000 500,000,000
500,000,000 500,000,000
Issued
79,323,266 (105,907,030) equity shares of Rs.2/- each (Rs.2/-) each 158,646,532 211,814,060
(after capital reduction, as per scheme of arrangement)
10,000 (-) equity shares of Rs.2/- each** (Rs.2/-) each 20,000 -
158,666,532 211,814,060
Subscribed and paid up
79,323,266 (105,764,355) equity shares of Rs.2/- each (Rs.2/-) each 158,646,532 211,528,710
10,000 (-) equity shares of Rs.2/- each** (Rs.2/-) each 20,000 -
158,666,532 211,528,710
Less : 78,750 (-) equity shares of Rs. 2/- each (Rs.2/-) each.
Shares held by subsidiary company 157,500 -
158,509,032 211,528,710
Out of the above
(i) 123,750 (165,000) equity shares of Rs.2/- (Rs.2/-) each
were allotted as fully paid up pursuant to contract for consideration other than cash.
(ii) 66,374,981 (88,499,975) shares of Rs.2/- (Rs.2/-) each were allotted as fully paid
up bonus shares by capitalisation of General Reserve and Share Premium
(iii) Nil (52,694,805) shares of Rs.2/- (Rs.2/-) each are held by
Better Value Holdings Pvt. Ltd., the erstwhile holding Company.
* [Refer note no. B - 10]
** kept in abeyance [Refer note no. B - 10]
158,509,032 211,528,710
101
102
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
SCHEDULE 2 : RESERVES AND SURPLUS
Capital Reserve
Balance as per last account 10,588,016 19,124,057
Add : Increase on account of acquisition of subsidiary (Net) 175,877 -
Less : Transfer to Profit & Loss Account - 8,536,041
10,763,893 10,588,016
[Includes Rs. 4,701,504/- (Rs. 4,701,504/-) on the acquisition of Associate Companies, Rs. 73,419/-(Rs. 73,419/-) on acquisition ofinterest in joint venture companies and Rs. 175,877 (Nil) on account of acquisition of subsidiaries]
Capital Redemption Reserve 6,625,000 6,625,000
Share Premium Account
Balance as per last account 395,881,752 395,881,752
Add: Premium on shares issued during the year 4,588,000 -
400,469,752 395,881,752
General Reserve
Balance as per last account 6,624,308,380 6,137,775,615
Less : Transfer as per scheme of arrangement [Refer Note No. B - 10] 615,487,490 -
Add : Reduction in capital as per scheme of arrangement [Refer Note No. B-10] 52,882,178 -
Add: Transfer from Aggregate Share in Retained Earnings of Associate Companies 235,332,220 -
Add: Transfer from Profit and Loss Account 428,127,535 486,532,765
6,725,162,823 6,624,308,380
Profit and Loss Account 630,197,581 504,311,757
Aggregate Share in Retained Earnings of Associate Companies
Balance as per last account 229,287,846 210,837,495
Add : Transferred from Profit and Loss Account 6,044,374 18,450,351
235,332,220 229,287,846
Less : Transferred to General Reserve 235,332,220 -
- 229,287,846
Foreign Exchange Translation Reserve
Balance as per last account 37,154,888 (5,365,745)
Addition / Deduction for the year (164,223,400) 42,520,633
(127,068,512) 37,154,888
7,646,150,537 7,808,157,639
SCHEDULE 3 : SECURED LOANS
Loans and advances from banks
Cash/Export Credit facilities 755,170,483 1,979,440,328
[Secured by hypothecation of tangible movable assets and book debts of the company]
Other loans and advances
External Commercial Borrowing from Credit
Agricole Corporate & Investment Bank 451,043,247 -
EXIM Bank - 145,454,548
Other Banks 363,985,608 445,455,646
[Secured by way of hypothecation of movable fixed assets and mortgage of immovable properties of the company (both present and future)].
Term Loan Secured by hypothecation of vehicles purchased out of this loan 44,520 178,080
1,570,243,858 2,570,528,602
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
SCHEDULE 4 : UNSECURED LOANS
Interest free loan under Sales Tax Deferral Scheme 70,371,293 70,874,590
Inter Corporate Deposits - 40,000,000
Foreign Currency Short term Loans and advances 1,942,636,593 230,220,000
Rupee Short term Loans and advances 936,859,163 1,070,000,000
2,949,867,049 1,411,094,590
SCHEDULE 5 : DEFERRED TAX-NET
Deferred Tax Liabilities
On depreciation/amortization of fixed assets 201,708,049 228,334,326
Other timing differences 58,484,276 52,469
260,192,325 228,386,795
Deferred tax assets
On employees voluntary retirement schemes 65,107 441,770
On provision for doubtful debts/advances 65,313,586 49,809,661
Provision for leave encashment and pension 40,766,613 87,371,187
Other timing differences 32,321,036 11,839,676
138,466,342 149,462,294
121,725,983 78,924,501
SCHEDULE 6 : FIXED ASSETS
Land Free/ Buildings Railway Plant & Furniture & Vehicles Total Previous Lease Hold Siding Machinery Fittings Year
Gross Block
At 01.04.2009 315,181,559 884,738,684 1,575,815 3,494,716,807 186,837,123 113,621,185 4,996,671,173 4,032,191,487
Addition of subsidiary 10,918,407 26,499,745 39,490 172,546,792 7,228,695 8,588,570 225,821,699 -
Elimination of subsidiary (18,429,624) - - - - - (18,429,624) -
Additions / Assets Acquired 1,744,740 425,148,754 34,500 645,186,499 39,017,075 17,030,206 1,128,161,774 1,001,008,201Additions/ Assets acquired /
transferred (5,766,477) 451,648,499 73,990 817,733,291 46,245,770 25,618,776 1,335,553,849 1,001,008,201 Additions on account of
revaluation 3,326,320 - - 137,473,500 - - 140,799,820 -
Deductions - 653,977 - 18,665,710 556,275 1,287,696 21,163,658 36,528,515
At 31.03.2010 312,741,402 1,335,733,206 1,649,805 4,431,257,888 232,526,618 137,952,265 6,451,861,184 4,996,671,173
Depreciation / Amortisation
At 01.04.2009 - 134,665,029 1,435,958 1,476,415,645 101,473,281 71,089,086 1,785,078,999 1,480,594,509
Addition of subsidiary 150,697 4,776,135 11,128 81,093,714 3,542,742 5,870,634 95,445,050 -
For the year 68,779 32,385,257 46,287 332,006,570 13,535,929 9,693,101 387,735,923 334,816,211 For the year including on
Assets Acquired 219,476 37,161,392 57,415 413,100,284 17,078,671 15,563,735 483,180,973 334,816,211
Recouped - 279,819 - 17,675,788 167,723 613,789 18,737,119 30,331,721
At 31.03.2010 219,476 171,546,602 1,493,373 1,871,840,141 118,384,229 86,039,032 2,249,522,853 1,785,078,999
Provision for Impairment - - - 2,500,000 - - 2,500,000 2,500,000
Net Block
At 31.03.2010 312,521,926 1,164,186,604 156,432 2,556,917,747 114,142,389 51,913,233 4,199,838,331 3,209,092,174
Assets under Erection including
Capital Advances - - - - - - 291,539,756 713,776,203
At 31.03.2010 312,521,926 1,164,186,604 156,432 2,556,917,747 114,142,389 51,913,233 4,491,378,087 3,922,868,377
At 31.03.2009 315,181,559 750,073,655 139,857 2,015,801,162 85,363,842 42,532,099 3,209,092,174
In respect of Fixed Assets, assets acquired / transferred include Rs. 207,392,075/- and depreciation for the year on assets acquired include Rs. 95,445,050/- on account of the opening block of the
companies acquired and transferred during the year.
(In Rupees)
103
2010 2009Rupees Rupees
SCHEDULE 7 : INTANGIBLE ASSETS
Gross Block
At 01.04.2009 101,403,688 94,433,936
Additions / Assets acquired 18,510,411 6,969,752
Deductions - -
At 31.03.2010 119,914,099 101,403,688
Amortization
At 01.04.2009 83,890,175 72,506,468
For the year including on assets acquired 15,146,207 11,383,707
Recouped - -
At 31.03.2010 99,036,382 83,890,175
Net Block as at 31.03.2010 20,877,717 17,513,513
Assets under implementation including capital advances. - 681,636
20,877,717 18,195,149
SCHEDULE 8 : INVENTORIES
Raw materials and components 991,463,433 796,478,622
Stores and spares 49,833,376 77,561,299
Work-in-progress 1,460,999,727 1,078,591,403
Finished goods 325,563,848 408,671,385
2,827,860,384 2,361,302,709
SCHEDULE 9 : GROSS AMOUNT DUE FROM CUSTOMERS
FOR PROJECT RELATED CONTRACT WORK
Cost incurred plus recognized profits less recognized losses 40,527,153,235 27,713,307,445
Less: Progress billing 37,782,255,043 25,371,085,478
2,744,898,192 2,342,221,967
SCHEDULE 10 : SUNDRY DEBTORS
Debts outstanding for a period exceeding six months
Unsecured, considered good 1,948,946,890 1,994,337,305
Considered doubtful 177,100,910 162,571,039
Other debts
Unsecured, considered good 6,169,587,822 6,128,594,295
8,295,635,622 8,285,502,639
Less: Provision for doubtful debts 177,100,910 162,571,039
8,118,534,712 8,122,931,600
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
104
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
SCHEDULE 11 : CASH AND BANK BALANCES
Cash on hand 11,927,912 6,246,551
Balances with scheduled banks
On current accounts 565,058,464 484,101,848
On deposit accounts 114,808,831 41,459,439
Balances with other banks
On current accounts 2,434,934 181,496
On deposit accounts 503,005,341 -
1,197,235,482 531,989,334
SCHEDULE 12 : OTHER CURRENT ASSETS
Interest accrued on investments 5,260,035 42,477,338
Claims receivable 1,401,565,691 819,164,297
Other current assets 1,139,826 -
1,407,965,552 861,641,635
SCHEDULE 13 : LOANS AND ADVANCES
Unsecured considered good
Advances recoverable in cash or kind or for value to be received 2,041,826,520 2,156,985,327
Considered doubtful 10,499,007 10,083,848
Balances with customs, excise, etc. 2,818,294 15,008,114
Deposits with post & others 1,260,921,538 714,523,139
Advance Income tax (net of provision for tax) 344,532,765 29,176,001
3,660,598,124 2,925,776,429
Less: Provision 10,499,007 10,083,848
3,650,099,117 2,915,692,581
SCHEDULE 14 : CURRENT LIABILITIES
Acceptances 12,651,080 81,637,916
Sundry Creditors 7,192,697,498 7,399,336,308
Advances and deposits from customers 2,941,489,950 2,660,238,515
Items covered by Investor Education Protection Fund
(a) Unpaid dividend 48,731,200 44,783,912
(b) Unpaid Matured Deposits 516,000 913,000
Other liabilities 781,128,227 361,106,943
Interest accrued but not due on loans 57,325,786 29,459,930
11,034,539,741 10,577,476,524
SCHEDULE 15 : GROSS AMOUNT DUE TO CUSTOMERS
FOR PROJECT RELATED CONTRACT WORK
Progress billing 8,918,354,977 7,364,837,239
Less: Cost incurred plus recognized profits less recognized losses 8,185,302,640 6,642,114,476
733,052,337 722,722,763
105
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
SCHEDULE 16 : PROVISIONS
Proposed dividend 486,665,213 233,528,710
Additional tax on dividend 80,980,317 40,370,725
Provision for product warranties 74,972,012 77,993,171
Provision for leave encashment 208,888,428 242,876,367
Provision for pension benefits 21,280,300 30,115,369
Other provisions 21,836,117 201,542,262
894,622,387 826,426,604
SCHEDULE 17 : SALES AND CONTRACT REVENUE
Sales (Gross) 15,272,601,358 14,624,994,996
Less: Excise duty recovered 504,243,006 651,949,696
14,768,358,352 13,973,045,300
Construction and project related revenue 11,820,847,444 10,553,687,615
26,589,205,796 24,526,732,915
SCHEDULE 18 : OTHER INCOME
Income from investments
Interest from long term investments 38,602,121 104,899,523
[(Tax deducted at source Rs.nil (Previous year Rs.nil)]
Dividend income
(a) Trade investment 27,613,523 144,182,568
(b) Other investments - Current - 2,731,115
(c) Other investments - Long term 5,393,733 111,891
Profit on sale of current investments - 102,841
Other Interest 3,879,685 2,578,698
Profit on sale of fixed assets 1,454,463 3,803,309
Royalty received 643,505 1,334,443
House rent 2,898,303 752,868
Recovery of bad debts 77,115,744 51,449,253
Agency Commission 24,422,926 -
Miscellaneous income 107,611,694 105,253,141
Transfer from capital reserve - 8,536,041
289,635,697 425,735,691
106
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
SCHEDULE 19 : MATERIALS CONSUMED
Raw materials consumed 13,191,239,045 13,087,603,929
Stores and spares consumed 409,013,729 450,357,510
Processing charges 761,033,000 634,228,206
Purchase of traded goods 4,164,003,641 3,951,783,319
18,525,289,415 18,123,972,964
(Increase)/Decrease in stocks
Opening stock
Work-in-progress 1,111,993,954 764,937,489
Finished goods 438,189,391 346,442,648
1,550,183,345 1,111,380,137
Closing stock
Work-in-progress 1,460,999,727 1,078,591,403
Finished goods 325,563,848 408,671,385
1,786,563,575 1,487,262,788
(236,380,230) (375,882,651)
18,288,909,185 17,748,090,313
SCHEDULE 20 : PAYMENTS AND BENEFITS TO EMPLOYEES
Salaries, wages and bonus 1,833,500,520 1,853,547,674
Payment under Voluntary Retirement Schemes - 2,811,710
Contribution to Provident Fund and E.S.I. 147,850,681 201,738,829
Gratuity 23,066,251 5,607,291
Welfare expenses 95,882,299 68,830,530
Pension benefits (806,993) 4,335,521
2,099,492,758 2,136,871,555
107
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2010 2009Rupees Rupees
SCHEDULE 21 : OPERATING AND OTHER EXPENSES
Power & fuel 195,890,747 203,382,123
Repairs and maintenance
Plant and machinery 109,066,396 118,923,335
Buildings 92,484,176 39,685,028
Rent 140,447,434 121,754,595
Rates and taxes 13,811,729 13,184,176
Travel and conveyance 349,474,360 354,219,850
Postage and telephone 102,091,512 76,733,581
Insurance 166,925,630 156,135,466
Directors' sitting fees 1,104,850 1,038,150
Directors' remuneration 101,976,008 64,373,469
Royalties and fees 56,479,572 48,376,810
Cash discount 75,475,631 31,971,149
Freight and forwarding charges 376,435,701 288,896,152
Brokerage and commission 265,325,830 281,882,883
Advertisements and publicity 275,499,563 83,400,188
Product warranty 68,614,035 45,232,716
Excise duty paid 13,687,668 15,995,473
Bank charges 182,839,239 164,805,855
Loss on sale/disposal of fixed assets 1,049,433 3,514,177
Loss on disposal of investments 123,535 -
Investment written off 500,000 -
Bad debts written off 20,319,232 9,099,367
Provision for doubtful debts and advances 81,793,710 88,198,223
Provision for decline in value of investments 49,483 25,399
Donations 19,524,852 10,642,033
Preliminary expenses written off 221,124 156,087
Loss on transfer of subsidiary companies (Net) (Refer note no B-10) 162,686,840 -
Other miscellaneous expenses 861,785,031 844,046,818
3,735,683,321 3,065,673,103
SCHEDULE 22 : INTEREST
Interest
On fixed loans and debentures 133,308,121 129,222,612
On other loans 321,509,906 281,465,084
454,818,027 410,687,696
SCHEDULE 23 : PROVISION FOR TAX
Income tax for the year
Current 748,827,475 449,533,946
Deferred 37,065,765 (10,953,746)
Fringe benefit tax - 24,174,580
Adjustments for earlier year/s 59,364 88,430
785,952,604 462,843,210
108
SCHEDULE 24 :
Name of the Company Country of
Incorporation Ownership Interest of KBL
NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS
Proportion of Reporting Date
A ACCOUNTING POLICIES
1. Principals of Consolidation
(i) The consolidated financial statements relate to Kirloskar Brothers Limited (KBL) and
a) its majority owned subsidiary companies, consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group transactions and the unrealised profit/ losses on intra-group transactions, and are presented to the extent possible, in the manner as the Company’s independent financial statements.
The names of the subsidiary companies, Country of Incorporation, Proportion of Ownership Interest and reporting dates considered in the Consolidated Financial Statements are:
th ` Pooja Credits Private Limited (up to 15.4.2009) @ India 100% 15 April,2009
thKirloskar Silk Industries Limited (up to 15.4.2009) @ India 100% 15 April,2009
stKirloskar Constructions and Engineers Ltd. India 100% 31 March, 2010
stSPP Pumps Ltd. (Consolidated Financial Statements) United Kingdom 100% 31 December, 2009
stGondwana Engineers Ltd. India 100% 31 March, 2010
Kirloskar Brothers International B.Vst (Consolidated Financial Statements) The Netherlands 100% 31 December, 2009
st The Kolhapur Steel Ltd. India 95.95% 31 March, 2010
thKirloskar Brothers (Thailand) Ltd. Thailand 100% 30 September, 2009
stHematic Motors Pvt. Ltd. (from 12.11.2009) @@ India 100% 31 March, 2010 (Consolidated Financial Statements)
st Pressmatic Electro Stampings Pvt. Ltd. (from 12.11.2009) @@ India 100% 31 March, 2010
st Quadromatic Engineering Pvt Ltd. (from 12.11.2009) @@ India 90.63% 31 March, 2010
stKirloskar Corrocoat Pvt. Ltd. (from 12.11.2009) @@ India 65.00% 31 March, 2010
@ Pursuant to the Scheme of Arrangement between Kirloskar Brothers Limited (Company), Kirloskar Brothers Investments Limited (KBIL) and their respective shareholders, investment in these companies are transferred
thto KBIL with effect from 16 April, 2009. (refer note no B -10)
@@ On November 12, 2009, the Company has acquired additional shares of the following companies and the Company has become the holding company of these companies:
• Kirloskar Corrocoat Pvt. Ltd.
• Hematic Motors Pvt. Ltd.
• Pressmatic Electro Stampings Pvt. Ltd.
• Quadromatic Engineering Pvt. Ltd.
Prior to the above acquisition of additional shares, Kirloskar Corrocoat Pvt Ltd was only a joint venture company and the other companies were associate companies.
The excess of cost to the company of its investment in the subsidiary company over the parents’ portion of equity is recognised in the consolidated financial statements as goodwill. The excess of company’s share of equity of the subsidiary company over the cost of acquisition is treated as capital reserve.
b) its jointly controlled joint venture companies by using proportionate consolidation method which means the consolidated Balance Sheet of KBL includes its share of assets that it controls jointly and its share of liabilities for which it is jointly responsible and the consolidated statement of Profit & Loss of KBL includes its share of the income and expenses of its joint venture companies. Under this method, separate line items of KBL’s share of the assets, liabilities, income and expenses of joint venture companies are included in its consolidated financial statements.
109
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
Name of the Company Country of Incorporation Ownership Interest of KBL
Kirloskar Ebara Pumps Limited India 45%
Kirloskar Corrocoat Pvt. Limited (up to 11.11.2009) India 50%
Share of the assets and liabilities of the above joint venture companies considered for proportionate consolidation :
Particulars Kirloskar Ebara Kirloskar Corrocoat Pumps Ltd. Pvt. Ltd.*
Particulars Kirloskar Ebara Kirloskar Corrocoat Pumps Ltd. Pvt. Ltd.
(up to 11.11.2009)
The jointly controlled joint venture companies considered in the consolidated financial statements are :
Proportion of
Sources of Funds
Reserves & Surplus 446,757,606 -
Secured Loans 23,212,373 -
Un-secured Loans 7,714,946 -
Deferred Tax (Net) 10,189,463 -
Application of Funds
Fixed Assets 194,058,017 -
Intangible Assets 2,721,681 -
Investments 100,424,508 -
Current Assets 330,041,507 -
Current Liabilities 137,121,325 -
Net Current Assets 192,920,182 -
* Kirloskar Corrcoat Pvt. Ltd. has become a subsidiary company of Kirloskar Brothers Limited with effect from November 12, 2009
Share of the income and expenses of the above joint venture companies considered for proportionate consolidation :
Income
Sales and Other Income 577,306,009 45,553,374
Expenditure
Materials consumed 291,934,927 21,779,425
Payments and benefits to employees 35,414,721 4,413,435
Operating and other expenses 67,543,063 10,928,352
Interest 372,745 920,265
Depreciation and amortization 15,870,640 1,673,222
Provision for Tax 55,958,886 661,500
Rs.
Rs.
110
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
Name of the company Proportion of Ownership Interest of KBL
Hematic Motors Pvt. Limited (consolidated financial statements) 36%
Pressmatic Electro Stampings Pvt. Limited 36%
Quadromatic Engineering Pvt. Limited 24%
Share of profits and losses of associate companies considered in the consolidated profit and loss account :
Name of the company Share of Profit/(Loss) Rs.
c) its associate companies by using equity method for accounting for KBL’s investment in its associate
companies. Under this method investment is increased or decreased to recognise KBL’s share of profits or
losses of the associate companies after the date of acquisition. Distributions received from the associate
companies reduce the carrying amount of investments. Where an associate company presents a
consolidated financial statement the results and the net assets taken into account are those reported in the
associate’s consolidated financial statements.
The associate companies considered in the consolidated financial statements :
Hematic Motors Pvt. Limited 3,431,698
Pressmatic Electro Stampings Pvt. Limited 2,236,064
Quadromatic Engineering Pvt. Limited 376,612
Total 6,044,374
2 Other Accounting Policies :
a) They are set out in the notes to accounts of the parent company - Kirloskar Brothers Limited.
b) The financial statements of all Indian subsidiaries, associates and joint venture companies have been prepared to comply in all material respects with The Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 and those of the foreign subsidiaries have been prepared in compliance with the local laws and applicable Accounting Standards.
c) Foreign Currency Transactions
The operations of the foreign subsidiaries are not considered as an integral part of the operations of the parent company. Hence, all monetary and non monetary assets and liabilities have been translated at the exchange rate
stprevailing as on 31 March, 2010.
Income and expenditure have been translated at the average rate of the exchange prevailing for the financial year. Gains and losses arising out of the translation are carried to “ Foreign Exchange Translation Reserve.”
3 Accounting policies other than those adopted by the parent company for the consolidated financial statements -
I Subsidiary Companies
a) Gondwana Engineers Ltd:
i) Provision for Long term benefits-leave encashment :
Leave encashment is accounted at the time of payment as against the basis of actuarial valuation followed by the Parent Company. The proportion of such provision in the consolidated statement is Nil (Nil) as there is no charge to the Profit and Loss account for the year.
ii) Depreciation:
Depreciation on fixed assets is provided on Written Down Value method as against Straight Line Method followed by the Parent Company. The proportion of such depreciation in the consolidated statement is 0.31% (0.30%).
111
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
b) Hematic Motors Pvt. Ltd. / Pressmatic Electro Stampings Pvt. Ltd. / Quadromatic Engineering Pvt. Ltd.
i) Depreciation on fixed assets is provided on Written Down Value method as against Straight Line Method followed by the Parent Company. The proportion of such depreciation in the consolidated statement is 3.53% (Nil).
ii) In case of Hematic Motors Pvt. Ltd. and Pressmatic Electro Stampings Pvt. Ltd.- finished goods, work in Progress, raw materials, stores, spare and tools are valued at ‘Cost or Net Realisable value whichever is lower’, by using FIFO method as against the weighted average method followed by the parent company. The proportion of such inventory in the consolidated statement is 6.57% (Nil).
II Joint Venture Companies
Kirloskar Ebara Pumps Limited
i) Work in Progress, raw materials, stores, spare and tools are valued at ‘Cost’ as against ‘Cost or Net Realisable value whichever is lower’, followed by the parent company. The proportion of such inventory in the consolidated statement is 3.73% (4.39%).
ii) Intangible Asset: Technical Knowhow fees, is amortised on Straight Line Method over the term of agreement as against on Straight Line Method over a period of three years. The proportion of such amortisation in the consolidated statements is 6.16% (6.49%).
B OTHER NOTES
1) The figures for the year ended March 31st, 2010 are not comparable with that of the previous year as the current year’s figures :
I) Include results of the operations of The Kolhapur Steel Ltd from 1st April 2009 to 31st March 2010 as against the period from 2nd August 2008 to 31st March 2009 in the previous year.
II) Include results of the operations of Kirloskar Brothers Thailand Ltd. from 1st October, 2008 to 30th September, 2009 as against the period form 26th September 2008 to 30th September 2008 in the previous year.
III) Include results of the operations of Pooja Credits Pvt. Ltd and Kirloskar Silk Industries Ltd for the period from 1st April 2009 to 15th April 2009 as against the period form 1st April, 2008 to 31st March 2009 in the previous year.
IV) Include results of the operations of Hematic Motors Pvt. Ltd., Pressmatic Electro Stampings Pvt. Ltd., and Quadromatic Engineering Pvt. Ltd as associate companies from 1st April 2009 to 11th November 2009, and as subsidiary companies from 12th November 2009 to 31st March, 2010, as against from 1st April, 2008 to 31st March 2009 in the previous year as associate companies.
V) Include results of the operations of Kirloskar Corrocoat Pvt. Ltd as joint venture company from 1st April, 2009 to 11th November, 2009, and as subsidiary company from 12th November, 2009 to 31st March, 2010, as against as joint venture company from 1st April, 2008 to 31st March, 2009 in the previous year.
2) The effect of acquisition and formation of subsidiary companies:
The acquisitions of Hematic Motors Pvt. Ltd., Pressmatic Electro Stampings Pvt. Ltd., Quadromatic Engineering Pvt. Ltd. and Kirloskar Corrocoat Pvt. Ltd. has resulted in:
I) an increase of Rs. 433,318,625/- (Previous year Rs. 17,311,221/-) in the financial position as on 31st March, 2010 as compared to 31st March,2009.
II) an increase of Rs. 35,426,898/- (Previous year Rs.2,383,403/- ) in group profit net of minority interest for the year ended on 31st March, 2010 as compared to the year ended on 31st March, 2009.
112
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
4) Contingent liabilities not provided for in respect of : 2010 2009Rupees Rupees
The details of consideration paid, Goodwill recognised and equity acquired are as under :
Rs.
Name of the Company Goodwill/ Consideration Equity(Capital Reserve) Paid
Recognised
Hematic Motors Pvt. Ltd. 111,663,382 217,371,299 105,707,917
Pressmatic Electro Stampings Pvt. Ltd. 161,570,397 266,918,468 105,348,071
Quadromatic Engineering Pvt. Ltd . 12,940,396 30,130,888 17,190,492
Kirloskar Corrocoat Pvt. Ltd. (570,676) 94,000,000 94,570,676
3) The effect of transfer of subsidiary companies: (refer note no B -10)
The transfer of Pooja Credits Pvt. Ltd. and Kirloskar Silk Industries Ltd. has resulted in net loss of Rs.162,686,840/-
a) Guarantees:
By the company to ICICI Bank Ltd. on behalf of SPP Pumps Ltd. (GBP 3,500,000) 239,540,000 257,320,000
By the company to Barclays Bank Ltd. on behalf of SPP Pumps Ltd. (GBP 4,000,000) 273,760,000 294,080,000
By the company to Citi Bank N A on behalf of SPP Pumps Ltd. (GBP 8,000,000) 547,520,000 588,160,000
By the company to Indian Overseas Bank Ltd. on behalf of Kirloskar Constructions and Engineers Ltd. 800,000,000 800,000,000
By the company to Bank of Maharashtra on behalf of Gondwana Engineers Limited 145,000,000 145,000,000
By the company to Citi Bank N.A. on behalf of Kirloskar Brothers (Thailand) Ltd. (USD 500,000) 22,640,000 -
b) Central Excise (Matter Subjudice) 31,719,618 14,347,263
c) Sales Tax (Matter Subjudice) 89,377,579 89,056,373
d) Income Tax (Matter Subjudice) 523,194,350 395,323,477
e) Labour Matters (Matter Subjudice) 37,474,843 39,278,282
f) Other Legal Cases (Matter Subjudice) 585,161,252 18,792,301
g) Other Matters 1,225,000 -
h) Letters of Credit Outstanding 2,201,793,248 2,366,640,832
5) Estimated amount of contracts remaining to be executed on capital account and not provided for 99,560,004 190,563,183
6) Construction Contracts:
a) Contract revenue recognised as revenue for the year ended 31st March 2010 11,820,847,444 10,553,687,615
b) The aggregate amount of contract costs incurred and recognised profits less recognised losses upto 31st March 2010 44,856,296,836 34,355,421,921
c) Amount of advances received as on 31st March 2010 for contracts in progress 1,500,973,831 1,305,754,671
d) Amount of retentions as on 31st March 2010 for contracts in progress 723,975,163 603,382,520
113
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
7. Related Party Disclosures
(A) Names of the related party and nature of relationship where control exists
Sr. Name of the related party Nature of relationship Effective Date
No.
1 Better Value Holdings Pvt. Ltd. Holding company up to 19.09.2009
2 Pooja Credits Pvt. Ltd. Subsidiary company up to 15.04.2009
3 Kirloskar Silk Industries Ltd. Subsidiary company up to 15.04.2009
4 Kirloskar Constructions and Engineers Ltd Subsidiary Company
5 Gondwana Engineers Ltd Subsidiary Company
6 The Kolhapur Steel Ltd. Subsidiary Company
7 Hematic Motors Private Ltd. Subsidiary Company from 12.11.2009
8 Vakasa Electricals Private Ltd. Subsidiary Company of Hematic Motors Pvt. Ltd
9 Moreshwar Electricals Private Ltd.. Subsidiary Company of Hematic Motors Pvt. Ltd
10 Ila Electricals Private Ltd.. Subsidiary Company of Hematic Motors Pvt. Ltd
11 Quadromatic Engineering Private Ltd. Subsidiary Company from 12.11.2009
12 Pressmatic Electro Stampings Private Ltd. Subsidiary Company from 12.11.2009
13 Kirloskar Corrocoat Private Ltd. Subsidiary Company from 12.11.2009
14 Kirloskar Brothers International B V Subsidiary Company
15 Kirloskar Brothers Europe B.V. Subsidiary of Kirloskar Brothers International BV
16 Kirloskar Brothers (Thailand) Ltd. Subsidiary Company
17 SPP Pumps Ltd. Subsidiary of Kirloskar Brothers International BV
18 SPP Pumps France EURL Subsidiary of SPP Pumps Ltd.
19 Certified Engines Ltd Subsidiary of SPP Pumps Ltd.
20 SPP (South Africa) (Pty) Ltd. Subsidiary of SPP Pumps Ltd.
21 SPP Pumps Holdings LLC Subsidiary of SPP Pumps Ltd.
22 SPP Pumps Management LLC Subsidiary of SPP Pumps Ltd.
23 SPP Pumps LP Subsidiary of SPP Pumps Ltd.
24 SPP France S A S Subsidiary of SPP Pumps Ltd.
25 Kirloskar Industries Ltd.
(formerly known as Kirloskar Oil Engines Ltd.) Fellow Subsidiary Company up to 15.04.2009
26 Kirloskar Pneumatic Company Ltd. Fellow Subsidiary Company up to 15.04.2009
27 Kirloskar Systems Ltd. Fellow Subsidiary Company up to 19.09.2009
28 Kirloskar Proprietary Ltd. Fellow Subsidiary Company up to 19.09.2009
114
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
(B) Disclosure of related party transactions
Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties* Major parties*
1 Purchase of goods & services
Enterprises over which key managementpersonnel or their relatives exercise significant influence 18,676,592 -
Fellow Subsidiary Companies 156,186,470 445,293,240
Hematic Motors Private Limited 154,422,268 193,844,417
Kirloskar Industries Ltd.
(formerly Kirloskar Oil Engines Ltd.) - 238,831,488
Associates & Joint Ventures 37,654,547 70,669,193
Kirloskar Corrocoat Private Limited 22,690,705 34,998,316
TOTAL 212,517,609 515,962,433
2 Sale of goods/contract revenue & services
Enterprises over which key managementpersonnel or their relatives exercise significant influence 18,819,411 -
Pradhan Engineering Karad 18,657,355 -
Fellow Subsidiary Companies 114,891 5,131,072
Kirloskar Industries Ltd
(formerly Kirloskar Oil Engines Ltd) - 2,060,148
Kirloskar Pneumatic Company Limited - 2,879,287
Associates & Joint Ventures 1,850,466 1,227,601
Kirloskar Corrocoat Private Limited 1,850,466 892,923
TOTAL 20,784,768 6,358,673
3 Rendering Services
Enterprises over which key managementpersonnel or their relatives exercise significant influence 111,330 -
Fellow Subsidiary Companies - 7,034,441
Kirloskar Systems Ltd. - 3,500,000
Kirloskar Pneumatic Company Limited - 2,247,200
Associates & Joint Ventures 13,038,943 11,769,810
Kirloskar Corrocoat Private Limited 7,659,612 11,769,810
Kirloskar Ebara Pumps Limited 5,379,331 -
TOTAL 13,150,273 18,804,251
Sr. Nature of transaction/relationship/major partiesNo.
115
4 Receiving Services
Fellow Subsidiary Companies 1,234,439 5,849,512
Kirloskar Systems Ltd. 880,050 1,664,040
Hematic Motors Private Limited 354,389 3,869,596
Associates & Joint Ventures 392,000 -
Key Management Personnel 600,000 450,000
Mr. Sanjay Kirloskar 600,000 450,000
Relatives of Key Management Personnel 2,500,000 2,610,000
Mrs. Pratima Kirloskar 1,250,000 900,000
Mrs. Vijayalaxmi Srivastava 600,000 600,000
Mrs. Asha J Sapre 600,000 600,000
Enterprises over which key managementpersonnel or their relatives exercise significant influence 867,533 -
Kirloskar Systems Ltd. 769,950 -
TOTAL 5,593,972 8,909,512
5 Purchase of Shares
Key Management Personnel 562,031,505 -
Mr. Sanjay Kirloskar 562,031,505 -
TOTAL 562,031,505 -
6 Royalty Paid
Fellow Subsidiary Companies 12,402,510 47,137,925
Kirloskar Proprietary Limited 12,402,510 47,137,925
Enterprises over which key managementpersonnel or their relatives exercise significant influence 39,253,992 -
Kirloskar Proprietary Limited 39,253,992 -
TOTAL 51,656,502 47,137,925
7 Dividend paid
Holding Company 106,414,684 211,625,340
Better Value Holdings Private Limited 106,414,684 211,625,340
Fellow Subsidiary Companies 210,000 630,000
Enterprises over which key managementpersonnel or their relatives exercise significant influence 105,000 -
Key Management Personnel 2,612,608 5,217,216
Relatives of Key Management Personnel 124,200 256,400
TOTAL 109,466,492 217,728,956
IRs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties* Major parties*
Sr. Nature of transaction/relationship/major partiesNo.
116
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
8 Dividend received
Fellow Subsidiary Companies 1,047,200 107,853,748
Hematic Motors Pvt. Ltd. 1,047,200 -
Kirloskar Industries Ltd.
(formerly Kirloskar Oil Engines Ltd.) - 73,903,270
Kirloskar Pneumatic Company Limited - 31,830,778
Joint Ventures 22,000,000 18,050,000
Kirloskar Ebara Pumps Limited 15,750,000 13,050,000
Kirloskar Corrocoat Pvt. Ltd. 6,250,000 5,000,000
TOTAL 23,047,200 125,903,748
9 Interest Paid
Fellow Subsidiary Companies 2,060,274 2,854,795
Hematic Motors Private Limited 2,060,274 2,793,151
TOTAL 2,060,274 2,854,795
10 Remuneration Paid
Key Management Personnel 104,713,439 54,450,136
Mr. Sanjay Kirloskar 34,644,382 17,447,835
Mr. Vikram Kirloskar 34,646,405 19,346,117
Mr. R. K. Srivastava 11,348,259 8,950,788
Mr. J. R. Sapre 11,771,527 8,705,397
Relatives of Key Management Personnel 1,600,766 530,000
TOTAL 106,314,205 54,980,136
11 Security deposit Paid
Key Management Personnel - 1,700,000
Mr. Sanjay Kirloskar - 1,700,000
Relatives of Key Management Personnel 1,700,000 3,400,000
Mrs. Pratima Kirloskar 1,700,000 1,700,000
Mr. Sanjay Kirloskar (HUF) - 1,700,000
TOTAL 1,700,000 5,100,000
12 Repayment of Inter Corporate Deposit
Fellow Subsidiary Companies 40,000,000 20,000,000
Pressmatic Electro Stampings Private Limited - 20,000,000
Hematic Motors Private Limited 40,000,000 -
TOTAL 40,000,000 20,000,000
Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties* Major parties*
Sr. Nature of transaction/relationship/major partiesNo.
117
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
13 Receipt of Inter Corporate Deposit
Fellow subsidiary Companies 10,000,000
Pressmatic Electro Stampings Private Limited - 10,000,000
TOTAL - 10,000,000
14 Royalty Received
Fellow Subsidiary Companies - 1,334,443
Kirloskar Industries Ltd.
(formerly Kirloskar Oil Engines Ltd.) - 1,334,443
TOTAL - 1,334,443
15 Reimbursement of Expenses
Fellow Subsidiary Companies - 8,499,133
Kirloskar Systems Ltd. - 1,568,195
Kirloskar Industries Ltd.
(formerly Kirloskar Oil Engines Ltd.) - 6,725,953
Associates & Joint Ventures 19,005 5,548,635
Kirloskar Corrocoat Private Limited 19,005 5,548,635
TOTAL 19,005 14,047,768
16 Security Deposit Refund
Key Management Personnel 1,700,000 -
Mr. Sanjay Kirloskar 1,700,000 -
TOTAL 1,700,000 -
Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties* Major parties*
Sr. Nature of transaction/relationship/major partiesNo.
118
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
1 Accounts receivable
Fellow Subsidiary Companies - 9,961,452
Kirloskar Systems Ltd. - 5,248,345
Kirloskar Pneumatic Company Limited - 4,079,499
Associates & Joint Ventures 1,294,328 -
Kirloskar Ebara Pumps Limited 1,294,328 -
Key Management Personnel 1,700,000 1,700,000
Mr. Sanjay Kirloskar 1,700,000 1,700,000
Relatives of Key Management Personnel 3,400,000 3,400,000
Mrs. Pratima Kirloskar 3,400,000 1,700,000
Mr. Sanjay Kirloskar (HUF) - 1,700,000
TOTAL 6,394,328 15,061,452
2 Amount Due
Fellow Subsidiary Companies - (144,374,147)
Hematic Motors Private Limited - (97,012,450)
Kirloskar Industries Ltd.
(formerly Kirloskar Oil Engines Ltd.) - (30,534,679)
Associates & Joint Ventures - (3,543,242)
Enterprises over which key managementpersonnel or their relatives exercise significant influence (13,863,128) -
Kirloskar Proprietary Limited (13,863,128) -
Key Management Personnel (60,205,479) (25,000,000)
Mr. Sanjay Kirloskar (25,000,000) (7,500,000)
Mr. Vikram Kirloskar (20,205,479) (7,500,000)
Mr. J. R. Sapre (8,000,000) -
TOTAL (74,068,607) (172,917,389)
Rs.
2009-2010 2008-2009
Amount Amount for Amount Amount for
Major parties* Major parties*
Sr. Nature of transaction/relationship/major partiesNo.
(C) Amount due to/from related parties
119
* "Major parties" denote entities who account for 10% or more of the aggregate for that category of transaction.
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
(D) Names of Related Parties with whom transactions have been entered into:
1) Holding Company Better Value Holdings Pvt.Ltd. up to 19.09.2009
2) Subsidiary Companies Pooja Credits Pvt. Ltd. up to 15.04.2009
Kirloskar Silk Industries Ltd. up to 15.04.2009
Kirloskar Constructions and Engineers Ltd.
Gondwana Engineers Ltd.
The Kolhapur Steel Ltd.
Hematic Motors Pvt. Ltd. from 12.11.2009
Vakasa Electicals Pvt. Ltd.
Moreshwar Electricals Pvt. Ltd.
Ila Electicals Pvt. Ltd.
Pressmatic Electro Stampings Pvt. Ltd. from 12.11.2009
Quadromatic Engineering Pvt. Ltd. from 12.11.2009
Kirloskar Corrocoat Pvt. Ltd. from 12.11.2009
SPP Pumps Ltd.
Certified Engines Ltd.
SPP (South Africa) (Pty) Ltd.
SPP Pumps LP
SPP Pumps Management LLC
SPP Pumps Holdings LLC
SPP Pumps France EURL
SPP France S A S
Kirloskar Brothers International B V
Kirloskar Brothers Europe B.V.
Kirloskar Brothers (Thailand) Ltd.
3) Fellow Subsidiary Companies Kirloskar Proprietary Ltd. up to 19.09.2009
Kirloskar Systems Ltd. up to 19.09.2009
4) Joint Ventures Kirloskar Ebara Pumps Ltd.
Kirloskar Corrocoat Pvt. Ltd. up to 11.11.2009
5) Key Management Personnel Mr. Sanjay Kirloskar
Mr. Vikram Kirloskar up to 20.01.2010
Mr. R. K. Srivastava
Mr. J. R. Sapre
120
6) Relatives of Key Management Mrs. Pratima Kirloskar Wife of Mr. S. C. Kirloskar
Personnel Mr. Alok Kirloskar Son of Mr. S. C. Kirloskar
Ms. Rama Kirloskar Daughter of Mr. S. C. Kirloskar
Mrs. Suman Kirloskar Mother of Mr. S. C. Kirloskar
Mr. Atul Kirloskar Brother of Mr. S. C. Kirloskar
Mr. Rahul Kirloskar Brother of Mr. S. C. Kirloskar
Mrs. Geetanjali Kirloskar up to 20.01.2010 Wife of Mr. Vikram Kirloskar
Mrs. Mrinalini Kirloskar up to 20.01.2010 Mother of Mr. Vikram Kirloskar
Mrs. Vijayalaxmi Srivastava Wife of Mr. R. K. Srivastava
Mrs. Asha J. Sapre Wife of Mr. J. R. Sapre
Ms. Preeti Sapre Daughter of Mr. J. R. Sapre
7) Jointly controlled operations HCC – KBL Joint Venture
KBL – MCCL Joint Venture
KCCPL – IHP – BRC – TAIPPL – KBL JV
IVRCL – KBL JV
Maytas – KBL JV
Larsen & Toubro – KBL JV
KBL-MEIL-KCCPL JV
KBL – PLR JV
KBL – Koya – VA Tech JV
KBL – PIL Consortium
Larsen & Toubro – KBL – Maytas JV
IVRCL – KBL – MEIL JV
Pioneer – Avantica – ZVS – KBL JV
AMR – Maytas – KBL – WEG JV
Indu – Shrinivasa Constructions – KBL – WEG JV
MEIL – KBL – IVRCL JV
MEIL – Maytas – KBL JV
KCCPL – TAIPPL – KBL JV
KBL-SPML JV
Aban-Coastal Joint Venture
Asian Techs Ltd.- ABCI Infrastructures (P) Ltd
8) Enterprises over which key Kirloskar Systems Ltd. management personnel or their Quadrant Communications Ltd.relatives exercise significant Kirloskar Proprietary Ltd.influence Niksan Agrotech India Pvt. Ltd.
Shrerang Industries
Shree Enterprises
Pradhan Engineering Enterprises Pvt. Ltd.
Cyrotech
AG Electro Services
121
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
8. Earning per Share (Basic and Diluted) 2010 2009
I - Basic Rupees Rupees
Profit for the year before tax 1,913,655,867 1,315,537,938
Less : Attributable tax thereto 785,952,604 462,843,210
Profit after tax 1,127,703,263 852,694,728
Total number of equity shares at the end of the year
used as denominator 79,254,516 105,764,355
Basic earning per share of nominal value of Rs 2/- each 14.23 8.06
II - Diluted
Profit for the year before tax 1,913,655,867 1,315,537,938
Less : Attributable Tax thereto 785,952,604 462,843,210
Profit after tax 1,127,703,263 852,694,728
Total Number of equity shares at the end of the year 79,254,516 105,764,355
Add : Weighted average number of potential equity
shares on account of employee stock option 1,598 -
Weighted average number of shares outstanding
used as denominator 79,256,114 105,764,355
Diluted earning per share of nominal value of Rs 2/- each 14.23 8.06
9. Particulars related to Joint Ventures :
List of Joint Ventures
Name of the Joint Venture Description Country of Incorporation
Kirloskar Ebara Pumps Ltd. Jointly controlled entity India
Kirloskar Corrocoat Pvt. Ltd. Jointly controlled entity India
HCC – KBL Joint Venture Jointly controlled operations India
KBL – MCCL Joint Venture Jointly controlled operations India
KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly controlled operations India
IVRCL – KBL JV Jointly controlled operations India
Maytas – KBL JV Jointly controlled operations India
Larsen & Toubro – KBL JV Jointly controlled operations India
KBL-MEIL-KCCPL JV Jointly controlled operations India
KBL – PLR JV Jointly controlled operations India
KBL – Koya – VA Tech JV Jointly controlled operations India
KBL – PIL Consortium Jointly controlled operations India
Larsen & Toubro – KBL – Maytas JV Jointly controlled operations India
IVRCL – KBL – MEIL JV Jointly controlled operations India
Pioneer – Avantica – ZVS – KBL JV Jointly controlled operations India
AMR – Maytas – KBL – WEG JV Jointly controlled operations India
Indu – Shrinivasa Constructions – KBL – WEG JV Jointly controlled operations India
MEIL – Maytas – KBL JV Jointly controlled operations India
MEIL – KBL – IVRCL JV Jointly controlled operations India
MEIL – Maytas – KBL JV Jointly controlled operations India
KCCPL – TAIPPL – KBL JV Jointly controlled operations India
KBL-SPML JV Jointly controlled operations India
Aban-Coastal Joint Venture Jointly controlled operations India
Asian Techs Ltd.- ABCI Infrastructures (P) Ltd Jointly controlled operations India
122
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
10. Pursuant to a Scheme of Arrangement between Kirloskar Brothers Limited (Company), Kirloskar Brothers Investments Limited (KBIL) and their respective shareholders the subscribed and paid-up equity share capital of the Company which was Rs. 211,528,710/- consisting of 105,764,355 equity shares of Rs. 2/- each stands reduced to Rs. 158,646,532/- consisting of 79,323,266 equity shares of Rs. 2/- each. This excludes further subscribed and Paid-up equity share capital of Rs. 20,000/- consisting of 10,000 equity shares of Rs. 2/- each issued and allotted under the Company’s Employees’ Stock Option scheme during the year. These 10,000 shares are kept in abeyance for want of specific Bombay High Court orders for giving effect of terms of scheme with regard to capital reduction in the company.
The Company has complied with the conditions stipulated in the High Court order and effective date of the Scheme is March 2, 2010. The appointed date of Scheme of Arrangement is April 16, 2009. As contemplated in the scheme, certain specified investments, including Pooja Credits Pvt. Ltd. and Kirloskar Silk Industries Ltd. held by the Company stand transferred to and vested in KBIL without any further acts, deeds and actions.
11. On February 15, 2010, Kirloskar Brothers Limited (KBL) has sold the shares held in its Wholly Owned Subsidiary SPP Pumps Ltd (SPP) to its Wholly Owned Subsidiary based in the Netherlands, namely Kirloskar Brothers International B.V (KBI). KBI has issued 1000 shares of Euro 100 each to KBL at a premium, towards the consideration for transfer of SPP shares to them by KBL. Since the reporting date of both SPP and KBI is 31st December, 2009, this transaction has not been considered in the consolidated financial statements (CFS) of KBL. Consequently the profit recognised in the stand alone financial statements of KBL of Rs. 224,793, 816/- is not considered in CFS.
12. On September 19, 2009, Bettervalue Holdings Private Limited (BVHPL) has sold all the shares held of Kirloskar Brothers Limited, through inter se transfer amongst the group, to other promoters. As a result, BVHPL has ceased to be the holding company of Kirloskar Brothers Limited.
13. During the year Kirloskar Constructions & Engineers Ltd., has revalued land and plant and machinery as on 31st March, 2010 based on the revaluation certified by an Approved Valuer. The resultant surplus on revaluation of these assets is credited to the revaluation reserve.
14. Figures of the previous year have been regrouped wherever necessary. Figures in bracket relate to the previous year.
123
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
15 Segment Information in respect of KBL and its Subsidiaries and Joint Venture Companies
(A) Primary Segments - Business Segments Pumps Others Eliminations Total AmountRupees Rupees Rupees Rupees
a) Segment Revenue
Sales to External Customers 24,440,160,771 2,149,045,025 - 26,589,205,796
(22,243,496,210) (2,283,236,705) - (24,526,732,915)
Inter Segment Revenue - 131,235,577 131,235,577 -
(5,075,202) (758,888,261) (763,963,463) -
Total Segment Revenue 24,440,160,771 2,280,280,602 131,235,577 26,589,205,796
(22,248,571,412) (3,042,124,967) (763,963,463) (24,526,732,915)
b) Segment Result 2,542,918,130 316,675,451 2,859,593,581
(1,717,483,434) (217,442,114) (1,934,925,548)
Less :
I) Interest 454,818,027
(410,687,696)
II) Unallocable Corporate expenditure
(net of other income) 552,737,218
(455,567,106)
Add :
I) Income from Investments 66,077,561
(226,861,554)
Total Profit Before Tax 1,918,115,897
(1,295,532,299)
Less : Provision for Tax 748,886,839
(449,622,376)
Less : Deferred Tax 37,065,765
(10,953,746)
Less : Fringe Benefit Tax -
(24,174,580)
Net Profit 1,132,163,293
(832,689,089)
c) Segment Assets 18,912,500,216 4,197,199,019 - 23,109,699,235
(17,298,071,057) (2,110,653,969) (19,408,725,026)
Unallocable Corporate Assets 2,111,383,213
(4,906,147,461)
Total 25,221,082,448
(24,314,872,487)
d) Segment Liabilities 10,553,129,895 3,068,691,637 - 13,621,821,531
(10,802,739,621) (1,542,347,051) (12,345,086,672)
Unallocable Corporate Liabilities 3,682,229,823
(3,562,043,897)
Total 17,304,051,355
(15,907,130,569)
e) Cost Incurred during the period to
acquire Segment Fixed Assets 390,767,557 131,226,868
(613,699,193) (387,309,009)
f) Depreciation / Amortisation / Impairment 242,633,211 76,470,434
(219,556,297) (80,984,718)
g) Non Cash Expenses other than 71,160,804 11,982,891
Depreciation / Amortisation (154,573,239) (21,122,367)
B) Secondary Segment - Domestic Export Total Rupees Rupees Rupees
a) Segment Revenue Geographic Segment 21,596,329,918 4,992,875,878 26,589,205,796
by location of customer (19,448,498,310) (5,078,234,605) (24,526,732,915)
b) Carrying Amount of Segment Assets by location of assets 24,527,745,100 693,337,349 25,221,082,448
(23,537,614,676) (777,257,811) (24,314,872,487)
c) Cost Incurred during the period to 503,431,941 18,562,483 521,994,424
acquire Segment Fixed Assets (984,242,992) (16,765,209) (1,001,008,201)
124
top related